Borromin invests in Little John Bikes

Harriet Matthews
11 June 2021

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Borromin Capital has acquired a stake in Germany-based bike and e-bike retailer Little John Bikes.

A source close to the situation told Unquote that there was a small M&A process for the company towards the end of 2021.

As well as facilitating continued organic growth, the GP said in a statement that it intends to support the company in the consolidation of the fragmented bike and e-bike retailer market, acquiring individual specialist retailers or small chains.

The same source told Unquote that potential add-ons are likely to come about via potential succession solutions and will be focused initially on regions in Germany where the company is already present.

The deal is the sixth platform investment from Borromin Capital IV, which is now more than 50% deployed. The fund held a final close in March 2019 on €297m, surpassing its €250m target. Borromin invests in lower-mid-market Benelux and DACH businesses with enterprise values of €20-150m.

Oldenburgische Landesbank provided debt to back the buyout, according to a statement. The financing also includes a working capital facility.

Demand for bikes and e-bikes increased significantly as coronavirus lockdowns prompted consumers to seek different leisure activities and to use public transport less frequently.

The sector has drawn interest from PE players in the DACH region in recent months. At the larger end of the market, Sienna Capital acquired bike producer Canyon Bikes in a €800m SBO from TSG Consumer Services in December 2020. In September 2020, Bregal acquired children's bikes and accessories developer Woom, noting in a statement that the company's revenues had increased by more than 60% compared with the previous year by that point in 2020.

Company
Founded in 1997 and headquartered in Neukirch, Little John Bikes is a retailer of bikes and e-bikes. The company has 41 branches. It posted 2019 revenues of €30.7m, although the same source told Unquote that its 2020 revenues were significantly higher than this figure.

People
Borromin Capital – Martin Franke (partner); Nick Money-Kyrle (managing partner).

Advisers
Equity – Flick Gocke Schaumburg, Martin Oltmanns, Mathias Bülow, Justus Bode, Johan Schrader, Andreas Wirtz (legal); EY, Susanne Dangir, Birgit Normann, Vincent Tweebeeke (tax); KPMG, Frank Hengelbrock, Bennet Weidenbach (financial due diligence); Jörg Preuß, Joeri Jägers (commercial due diligence); Tauw, Marc Göbbles, Gwendolyn Peter (ESG due diligence); Euro Transaction Solutions, Jürgen Reinschmidt, Mario Thiem, Anna Arhanghelschi (insurance due diligence).