The world's largest cycle manufacturer Hero Cycles Ltd has agreed to acquire a controlling equity stake in the UK-based cycle distributor Avocet Sports Ltd, in a move that would mark its entry into the European market, according to a press statement.
Financial details on the deal, however, have not been disclosed.
Avocet is one of the top three distributors of bicycles, e-bikes, bicycle parts and accessories in the UK and has existing retail relationships with retailers such as Tesco, Halfords, Asda, Shop Direct and Amazon.
The company offers a range of products, including hybrid, folding, road, children's, mountain, BMX and roadster bikes. Its brands include Viking, Coyote, Rooster, Ryedale, Concept and Riddick.
“This acquisition marks our entry into the European market and plays an important role in realising our ambition of becoming one of its key players. We are excited by our association with Avocet Sports which is one of the trusted names in the cycle segment in the UK,” Hero Cycles chairman and managing director Pawan Munjal said in the statement.
Incorporated in 1950, Hero Cycles is the largest cycle manufacturer by volume in the world and has a manufacturing capacity of 7.5 million bicycles per year, with its manufacturing units in Ludhiana (Punjab), Bihta (Bihar) and Ghaziabad (UP).
It also manufactures automotive rims and various other precision-engineered auto components. In the financial year 2014, the company produced 5.5 million bicycles.
Moreover, it exports to various countries in Asia, West Asia, Africa, and Europe.
Originally part of same Hero Group, though run separately, the Munjal family’s business was formally split four years ago which made Hero Cycles totally separate from Hero MotoCorp (formerly Hero Honda).
Last year in August, Hero Cycles agreed to invest €15 million ($19.8 million) in loss-making German bicycle firm MIFA Mitteldeutsche Fahrradwerke AG (MIFA), as part of a multi-tier deal which would give Hero Cycles around 47 per cent in the Frankfurt Stock Exchange-listed MIFA. However, the deal was called off due to non-fulfillment of a condition of the agreement by the company.
Hero Cycles was advised by Grant Thornton and Osborne Clarke in the transaction, while Avocet was advised by DWF and Cowgill Holloway.