Santa Cruz Bicycles sold to Pon Holdings
Company headquarters in West Santa Cruz (click to enlarge).
Stunning news greeted us this morning as Santa Cruz Bicycles was acquired by Dutch company, Pon Holdings. This is certainly unsettling as ownership change can always signal a change in direction or core values. On the surface though, it seems like business as usual will prevail at the company as all management staff is retained and no corporate changes have been announced.
In the short term, what this means is owners Rob Roskopp and Rich Novak will become very rich men as this gives a liquidity event to a privately-held asset. Any stockholders in the company will get a portion of the acquisition price as well. The price paid for the company is undisclosed since Santa Cruz Bicycles is a privately owned company.
The floor is optimized for the assembly of bikes (click to enlarge).
Pon Holdings is massive company with 13,000 employees in many different fields including automotive. They are building a bicycle portfolio and now own the following companies: Santa Cruz, Juliana, Cervélo, Focus, Gazelle, Union, Kalkhoff, Univega, Rixe, BBB Cycling. This gives Santa Cruz Bicycles funds to grow and potential synergies with the other brands in terms of collaborating, distribution and manufacturing.
What does the future hold for Santa Cruz Bicycles? Will there be any change to one of our most revered brands? Our take is it will be business as usual for now and success earns the existing management team control. But since there are new owners, the original owners who have steered the company now answer to a different group and the direction of the ship can change with the times. One thing for sure is Santa Cruz can have a much bigger presence in Europe as they can now navigate the complex logistics and laws with ease.
The corporate headquarters showroom (click to enlarge).
Update: July 5, 2015 – Cervelo Parallel
It is hard to predict what the future holds for the iconic Santa Cruz brand. But this event introduces a hint of uncertainty about the company’s future. Very little will change in the short term but new, overseas owners always spells a different, mid-term and long-term path for the company. Companies always have the best intentions during a buyout but the true test is the state of the company after a few years. Where will the company be in two years? What about five?
The key questions are: Will the new owners be hands-off and patient with the company’s direction and management? And will the Santa Cruz founders and key management stay with the company?
On the upside, the new owners, Pon Holdings is a well-funded, privately held, family run organization. This is ideal as it will be a stable group not pulled in many different directions by a board of investors. They can stay the course and allow the company more freedom to succeed. Their capital and industry affiliations will allow Santa Cruz to grow as well. Entering the global marketplace is a daunting task with the maze of rules and regulations. Having the backing and experience of Pon Holdings will help Santa Cruz expand.
A very similar acquisition was done by Pon Holdings when they acquired Cervelo in late 2012. Cervelo was a highly revered, R&D based brand with strengths in the Road and Triathlon categories. They also had an impressive racing presence, sponsoring powerful Tour de France teams every year. The founders Phil White and Gerard Vroomen had very similar visions of accessing the capital and experience of Pon Holdings.
An insightful interview of Phil White was done by Bicycle Retailer and Industry News shortly after the acquisition. Read Cervélo’s White: We can grow by delivering.
Phil White is answering questions at 2012 Eurobike (click to enlarge).
Fast forward to today and Cervelo is a different company now. Gerard Vroomen is now longer with the company as he is now involved with smaller companies (Open and 3T). Phil White has taken on a different role Pon Holdings as he is now overseeing other companies in the bike portfolio. Cervelo is no longer a sponsor of Garmin Slipstream team and is now involved with a smaller, South African based team called MTN-Qhubeka.
This is certainly no indicator for what will happen to Santa Cruz but it does illustrate the shift when the company has different owners and when the founders are no longer invested in the brand.
For a tour of the the company headquarters, check HERE
Continue to page 2 for the official press release by PON Holdings »
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