TSG Consumer Partners sells stake in Canyon Bicycles

Harriet Matthews
15 December 2020

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TSG Consumer Partners has sold its stake in Canyon Bicycles via a buyout that will see Belgium-based, listed investment holding company Groupe Bruxelles Lambert (GBL) acquire a stake in the business.

The transaction is expected to complete in Q1 2021.

Roland Arnold, Canyon Bicycles' founder, will continue in his role as chairman of the advisory board. Arnold will remain the company's largest individual shareholder, Canyon said in a statement, with a minority stake of 40%.

Tony Fadell, former head of Apple's iPod division, is also co-investing alongside GBL.

The company is expected to report EBITDA of €54m in 2020, according to Reuters. Canyon's enterprise value is around €800m, Handelsblatt and Reuters reported, implying an entry multiple of approximately 15x EBITDA.

The transaction came about via a structured process led by Baird, as reported by Unquote sister publication Mergermarket in September 2020. Reports from Mergermarket in September and December 2020 cited sources who said that Carlyle, KKR, General Atlantic and Permira had shown interest in the process. The business was marketed based on EBITDA of more than €35m, the reports noted.

TSG confirmed in a statement issued in September 2020 that the company was up for sale, with the aim of seeking a new equity investor for the company's future expansion.

During TSG's investment period, the GP assisted Canyon with its US expansion, according to TSG's website. A statement from Canyon said the company has experienced average yearly growth of 25% for the past seven years.

Previous funding
TSG invested in Canyon Bicycles in 2016 via TSG 7, acquiring a minority stake. TSG 7 focuses on consumer businesses with revenues of $20m-1.5bn, deploying equity tickets of $15-500m. TSG's investment in Canyon in 2016 was valued in the €25-50m range, according to Unquote Data.

Company
Canyon Bicycles designs and manufactures a range of bicycles including road bikes, mountain bikes, hybrid bikes and e-bikes. Founded in 1985 and based in Koblenz, the company reports revenues of €400m, compared with revenues of €160m in 2015, when TSG first invested. Canyon employs 900 people in 35 countries.

People
TSG Consumer Partners – Blythe Jack (managing director).
Groupe Bruxelles Lambert – Ian Gallliene (CEO).
Canyon Bicycles – Roman Arnold (founder, chairman of the advisory board).

Advisers
Company – Baird (corporate finance).