The Accell Group confirmed last week that it was holding talks with Pon Holdings, after Pon issued a conditional bid for the acquisition of Accell. The tie-up between the two Dutch conglomerates would form a global market leader with annual bicycle sales of about 2.3 million units worth €1.7 billion.
Pon Holdings is the owner of the Pon Bike Group, which has brands from Gazelle to Derby, Cervélo, Santa Cruz and more. It anticipates sales of about 800,000 bicycles this year to generate sales in the range of €700 million. The Accell Group is already the European market leader with brands such as Batavus, Koga, Lapierre, Haibike, Diamondback and many others, which yielded a turnover of €1,048.2 million and Ebit of €60.4 million in 2016. It is also a major player in the U.S. market.
The offer was sent to the Accell board on March 17 and publicized on April 11 after a report in De Telegraaf, a Dutch newspaper. Accell said that the bid consisted of a public offer for all issued and outstanding shares of Accell, set at an indicative offer price of €32.72 per share in cash, including the proposed dividend of €0.72 per share for 2016.
The initial bid amounts to about €845 million for all of Accell, equivalent to 14 times the operating profit reported by the Dutch group for 2016. The price offers a premium of 31 percent compared with the Accell share's closing price of March 16 on the Amsterdam stock exchange, and 23 percent more than the all-time high reached on April 10.
The Pon Bike Group was formed in the last years through acquisitions, starting in 2011 when Pon bought Gazelle. Pon Holdings is one of the largest Dutch family-owned companies, specialized in automobile sales, which decided to branch out into another part of the mobility sector. It started off as an importer for Volkswagen but has since expanded to sell Audi, Porsche, Bentley, Lamborghini and more, generating annual sales of nearly €7 billion, according to De Telegraaf.
Pon Holdings reckons that there is an outstanding strategic fit between the bike activities of Pon and Accell, adding that the two groups together would have sufficient scale to be a long-term winner in the industry. Accell was quick to add that there was no certainty of any deal going ahead.
Furthermore, it would almost certainly lead to a review by the competition authorities, since the two companies together would have a share of more than 30 percent in Germany and perhaps more than 50 percent in the Netherlands, according to analysts in The Financial Times. The two players play a particularly dominant part in the market for electric bicycles, which have been pushing up Accell's sales in the mature Dutch and German markets.
The bid comes shortly after the Accell group announced that its long-time chief executive, René Takens, is preparing to retire at the upcoming shareholders' meeting, scheduled for April 25. Pon Bike has been led since 2015 by Armin Landgraaf, a former consultant.
