Dorel buys Cannondale, still does nothing for sport

Fausto Coppied

Dorel Industries has bought Cannondale. The Montreal-based Dorel now owns a huge share of the bicycle market world-wide yet they do almost nothing to sponsor the sport in Canada.

Dorel is a wealthy company but poor corporate citizen.

Their CEO Martin schwartz is one of the highest paid in Canada.

At the Helm:


Martin Schwartz
President, Chief Executive Officer and Director
Salary: CAD 800,000
Bonus: CAD 777,241
http://today.reuters.com/news/artic...2-CompanyNews-2

Full bio: http://stocks.us.reuters.com/stocks...fficerID=611940


(Martin Schwartz, whose 2005 bonus was $525,000 (down from $900,000 in 2004) on top of a base salary of $750,000)
"Dorel blames slowing revenue on high price of particleboard:'We can make money. It just takes time': CFO"

PAUL DELEAN, The Gazette, http://www.canada.com/montrealgazet...24-72def6693384



Write Dorel and tell them you will boycott their bikes for screwing over cyclists.....




February 4/08 11:45 am EST - Dorel Acquires Cannondale Bicycle Corp.

Dorel Acquires Cannondale Bicycle Corp.
Courtesy Dorel Industries

Dorel Industries Ltd. (TSX: DII.A, DII.B today announced it has acquired the Cannondale Bicycle Corporation, a leading designer, developer and manufacturer of high-end bicycles. Headquartered in Bethel, Connecticut, Cannondale has facilities in Bedford, Pennsylvania as well as offices in Canada, Switzerland, Holland, Japan, and Australia. Widely regarded as the bike industry's leading innovator, Cannondale's handcrafted bicycles have won numerous design awards and are sold in over 70 countries. The purchase also includes Sugoi Performance Apparel. Sugoi products are used worldwide by runners, cyclists, triathletes and fitness enthusiasts who demand the best apparel available.

The total value of the all-cash transaction will be US$190 to US$200 million, subject to Cannondale's earnings results for the year ending June 30, 2008. The transaction, which will be immediately accretive to Dorel's earnings, is being financed through debt. Cannondale and Sugoi are being purchased from an affiliate of Pegasus Capital Advisors, which acquired the company in 2003. 2007 sales for Cannondale and Sugoi were approximately $200 million.

A clear strategy for the IBD category
Dorel President and CEO, Martin Schwartz stated that in light of the acquisition the Company's Recreational/Leisure segment is being split into two distinct operating divisions. A new Dorel Independent Bicycle Dealers (IBD) division, the Cannondale Sports Group, is being created and will focus exclusively on this category with premium-oriented brands. Backed by Dorel's extensive resources, the Cannondale Sports Group will build on Cannondale's strengths to grow significantly within the IBD channel. "Our intention is to build a world-class company that dealers will want to buy from," said Mr. Schwartz.

Pacific Cycle will become a stand-alone division with an exclusive focus on mass merchant customers.

"The Cannondale purchase is consistent with Dorel's plan to concentrate on its core businesses. Since buying Pacific Cycle [Schwinn, Mongoose, GT brands] in 2004 we have learned a great deal about the bicycle industry and have found it to be a true value driver for Dorel. We are committed to pursuing this sector, and this important transaction will position us globally in a most material way. Dorel recognizes the importance and potential of the Independent Bicycle Dealer channel and is purchasing Cannondale as the first step to become the world's number one IBD player. Cannondale will be the crown jewel of this new Dorel division, which will seek additional such growth opportunities."

Note: Please refer to the separate release below: "Dorel Creates IBD and Mass Bike Divisions".

"We're excited about the future for Cannondale and our retailers. Cannondale's goal is to be the number one supplier to the IBD channel. Dorel's vast resources and experience provide us with long term stability and the ability to accelerate our goals for growth with our retailers," stated Matt Mannelly, President and CEO of Cannondale.

A history of innovation, a record of wins
Cannondale has come a long way since its establishment in 1971, when it introduced the cycling industry's first bicycle trailer. The company grew quickly, adding cycling apparel and accessory lines while earning a strong reputation for innovation and quality. Cannondale raised the cycling world's eyebrows by equipping its bicycles with handcrafted aluminum frames that were both lighter and more flex-resistant than the steel models that dominated the industry at the time.

Many of the ideas that keep Cannondale products on the cutting edge come from the sponsored athletes on the Company's professional racing teams. Cannondale has an outstanding heritage in competitive cycling and has consistently been on the leading edge of sports marketing. Cannondale bikes have been powered to multiple stage wins in the Tour De France and have won 4 overall Giro d'Italia titles alongside countless World Cup Wins and World Championship titles off road. Today Cannondale continues to push the envelope in bicycle innovation and material expertise and is the bike of choice for the Liquigas Pro Cycling Team, Cannondale Vredestein professional mountain bike team, along with mountain bike legend Tinker Juarez and a host of other world class professional cyclists and triathletes.

Mr. Schwartz stated that Dorel's Recreational/Leisure segment has an enormous opportunity to capitalize on the changing mindsets and trends around the world. "Increasingly, people are actively engaged in seeking healthier lifestyles; are concerned about the environment, and want to do something about it; and desire sustainability at all levels. We sincerely believe our products can help meet these objectives. This transaction underlines our plan to further unlock value within the Company, concentrating on the Recreational/Leisure and Juvenile segments which provide the greatest potential."

Profile
Dorel Industries (TSX: DII.B, DII.A) is a global consumer products company engaged in the designing, manufacturing and marketing of a diverse portfolio of powerful consumer brands, sold through its Juvenile, Recreational/Leisure and Home Furnishings segments. Headquartered in Montreal and with significant operations in the United States and Europe, Dorel employs approximately 4,700 people in 15 countries. Annual sales are US$1.8 billion and are made in over 60 countries worldwide.

3 US operations include Dorel Juvenile Group, which markets the Cosco and Safety 1st brands as well as Eddie Bauer and Disney Baby licensed products; Pacific Cycle, which markets several brands including Schwinn, Mongoose, GT, InSTEP, Playsafe and Roadmaster; and Ameriwood Industries, which markets ready-to-assemble furniture products under the Ameriwood, Carina, SystemBuild, Altra Furniture and Ridgewood brands; Cosco Home & Office, which markets home/office products under the Cosco brand and Samsonite license as well as home healthcare products under the Cosco Ability Essentials and Adepta brands. In Canada, Dorel operates Dorel Distribution Canada, Ridgewood Industries and Dorel Home Products. Dorel Europe markets juvenile products throughout Europe, under the B?b? Confort, Maxi-Cosi, Quinny, Safety 1st, Babid?al, Mon B?b? and Baby Relax brands. Dorel Asia sources and imports home furnishings products. Dorel is the majority owner of In Good Care (IGC), a manufacturer and distributor of juvenile products in Australia, whose two principal brands are Bertini and Mother's Choice. Dorel also has eight offices in China, headquartered in Shanghai, which oversee the sourcing, engineering and logistics of the Company's Asian supplier chain.

Cannondale profile
Founded in 1971, Cannondale is a global designer, developer and manufacturer of high performance bicycles apparel and accessories. With a strong reputation for continuous innovation and quality the company is headquartered in Bethel, Connecticut, USA with offices in Canada, Holland, Japan, Switzerland, Australia, and a manufacturing facility in Bedford, Pennsylvania.

Dorel Creates IBD and Mass Bike Divisions
Courtesy Dorel Industries

Dorel Industries Ltd. (TSX: DII.A, DII.B today announced it is re-organizing its Recreational/Leisure segment to create two distinct bicycle divisions to deal separately with the Independent Bicycle Dealer (IBD) and mass merchant channels. The changes are being made to coincide with today's announced acquisition of the Bethel, Connecticut-based Cannondale Bicycle Corporation. The purchase also includes the Sugoi Performance Apparel Company.

A new Dorel Independent Bicycle Dealer (IBD) Division, the Cannondale Sports Group, is being established and will devote all of its energies and resources exclusively to this channel. The Cannondale Sports Group will encompass Cannondale, Sugoi, GT and other premium-oriented brands, and will seek acquisitions in similar high quality, performance bicycle companies. Jeff Frehner, who has been President of Pacific Cycle for three years is leaving that position immediately to return to his roots in the bike business and will oversee the Cannondale Sports Group as President. The current Cannondale management team, headed by President and CEO, Matt Mannelly, will continue to run Cannondale within that group.

"I'm a diehard biking enthusiast. I love this space and am thrilled to be able to focus all of my energy on the IBD channel. With Cannondale and Dorel's resources, the sky is the limit. High quality, innovation and passion, this will be the DNA of our new division," said Jeff.

"This is an excellent strategic fit for Cannondale and a testament to all the hard work of Cannondale employees worldwide. This provides us with tremendous resources to continue to build our innovative brand. It also creates long term stability that will help us achieve our leadership goals in the IBD channel. We're excited to be the leading brand in Dorel's new IBD division. The end result will be a continuous flow of innovative product to our Dealers and consumers," commented Matt.

"Dorel recognizes that doing business with the IBD and mass merchant categories is two very different things and requires distinct strategies and specialized people selling the best products for those channels. We clearly realize this and are making the necessary adjustments to best meet the needs of our customers," stated Dorel President and CEO, Martin Schwartz.

Pacific Cycle, purchased by Dorel in 2004, will now be a stand-alone division focused on the mass merchant channel. Alice Tillett, who has been Executive Vice President, Mass and Sporting Goods Channel at Pacific Cycle, has been named President. With 18 years experience in the sector, 10 of those in the bike industry, Alice has a thorough knowledge of the mass and sporting goods sector and has engineered Pacific's growth in this channel.

Mr. Schwartz said the Cannondale transaction underlines the Company's plan to further unlock shareholder value by concentrating on Dorel's core Recreational/Leisure and Juvenile segments, which provide the greatest potential. "We are committed to pursuing this strategy, and this important transaction positions us globally in a most material way. Dorel recognizes the importance and potential of the Independent Bicycle Dealer channel and is purchasing Cannondale as the first step to become the world's number one IBD player."

velo711

What is the point of of giving the CEO's salary, It's a huge company isn't it?
It says Cannondales sales in Europe is 40%, it makes sense business wise to
to sponsor there. Cycling in Canada is low on the list of endorsed sports, I wish
it wasn't because I love it. Your negative waves are doing nothing. Get on the
CCA, lobby the government for more money than they give Curling, and try to
change the psyche of North Americans at the high school level so we can develop some cyclists. The only people who can't change are dead people and fools.

Fausto Coppied

You are obviously new to this so I'll cut you some slack.

The sport does not need more money from the government.

It needs more money from the private sector. Much more money.

Only two or three years ago the CCA used to get about $3 million from Sport Canada, about the same as skiing.

The CCA got about $600,000 in total sponsorship privately while Aplin Ski Canada gets about $20,000,000.

Now of course you will say skiing is more popular than cycling in Canada. It isn't if you look at the numbers from StatsCan but let's say it is just so you don't argue the meaningless point. There is no way skiing is 30 times more popular is it. No way.

The difference is incompetence at the CCA.

To point out further flaws in your logic, you claim cycling is not "big" in Canada yet this Montreal company has bought up many of the biggest names in the bike industry in US, Canada and Europe, so obviously, financially it is big in Canada, isn't it!

Finally, changing the sport at a grassroots level will do NOTHING.

Soccer Canada has 500,000 little kids playing. The professional sport in Canada and international results are nowhere.

It isn't about grassroots. That is a myth.

It is about pro sport, a big show and entertainment.

Develop the sport on professional level with big downtown road races and you will see the number of young riders grow expotentially.

If the CCA wants to get rid of it's Director General Lorraine Lafreniere, a women who probably knows less about cycling than you and wants to hire me, they have my number. I've been in the sport 35 years, she has one year in.

velo711

It seems ALL your experience has just made you bitter.

Fausto Coppied

Try, realistic.


As expected you have nothing to add to the discussion we haven't heard.

"Grass roots, get the kids involved."

Cycling isn't big."

"We need more government money."

Same flawed thought. All wrong.

Road Rage

I would tend to agree with Fausto on this topic about some corporate responsibility here in Canada towards our sport.

When Lorianne Muenzer won gold at the last Olympics she had to do it on a bike that she had to beg, borrow and steal parts for just to get to the starting line. She had to communicate with her coach on a cell phone back in Canada because they couldn't afford to bring him along! Her podium placing is just a great testament to her athletic prowess.

Where was Cervelo and the other Canuck manufacturers when this was going down? I would almost bet that she never heard a word from any of them at all.

And that's the part that grates me. A Canadian gold medalist riding a Canadian mount could have been the ultimate advertising campaign for any of our local manufacturers. Too bad they were either too greedy or just plain stupid to take advantage of it!

Fausto Coppied

You want stupid???

Here's stupid.

In a national interview with a Canadian Press reporter, Bill Kinash CCA Presiden in the months following Muenzer's medal said, "We have no plans to market her medal"!!!!

Stupid.

Not only was he too dumb to market the medal he was dumb enough to admit it to the entire country!!!

This the same guy that hired Steve Lacelle to run the sport he had no experience and and who resigned only to have Kinash hire Lorraine Lafreniere again with no relevant experience to run the sport for the country.

That Kinash is about as dumb as they come.

Ed's a ped

There are some things that you are missing here, but then you always do that to make your point and avoid your errors.

No one would touch Muenzer for marketing purposes. Great that she won an Olympic medal, but she didn't have the personality to stand up for any product or company. It wasn't just the CCA that wouln't stand behind her, local businesses, etc. would not.

Second, it is not Bill's call, there are paid people at the CCA who run the ship. And I agreee that they have done and continue to do a poor job.

But then look at the Swiss Cycling Federation. What do you think about their situation?

velo711

I still think "Grassroots" is what it's all about. If we compare ourselves to Australia which has a population of ten million less, I'm guessing the Aussie Federation of sport is kicking in ten times the amount ours is. Is it because it's
the way cycling is part of the culture? What has to change first is the attitude
towards it. In North America it's still perceived as a childrens toy instead of a viable means of transportation or a wonderful sport(which it is). It still starts with the young people, change the psyche and you can develop the sport. Granted, there is probably the wrong people in place(from what i've read) in
the governing body, but I appreciate the monumental tasks that is ahead of them. Yeah I would like to see it change, there is some world class talent out there and potential talent to be nurtured, but the way of thinking at the base
attitude has to deviate first. So how do we change it? 2c.

Fausto Coppied

First, I am sick of the apologists for the incompetents and incompetence in the sport in Canada. Why would you say major policy decisions at the CCA are not the responsibility of the President of the Association?

When the President and Directors do something stupid, which they do all the time, you blame the staff.

When the staff does something stupid, which they do all the time, you blame the Directors and President.

Who hired the staff at the CCA? Who hired people to run the sport who had no experience in the sport? Bill Kinash did.

So either way Kinash is to blame for that screwup and most others that have occured in the last five years.

As for this belief in the grass roots revival of bicycle racing in Canada, grass roots will not help without a thriving pro road racing scene.

Look at Soccer Canada, they have 500,000 players playing at grass roots levels. Canada's international results in soccer are far worse than its results in cycling.

You can have all the little kids in cycling you want but without an outlet and avenue for the best to grow and improve they will just quit as they get older.

You people lack vision and you lack perspective of what worked in the past.

Ed's a ped

Bill did do something right. Wasn't he in charge when you got fired?
I would guess by your lack of comment that you agree that Muenzer was not worth getting behind. As great as a person's achievements may be, if you don't have a personality that the public likes, you are not worth the marketing effort.

Nicola_Jam

You people all pick on Ed Arzouian but he is the voice of reason for so many things. Why is he constantlu banned on forums? There were posts asking the same thing on pedal and here is what the editor said "Sorry for the delay, I was out of town on business and returned to a deadline crunch as we also publish a number of other magazines besides Pedal. Any user who repeatedly posts content that is unsuitable i.e. defamatory, insulting, abusive, vulgar etc. may be banned from this, or any, forum.

Thanks,
Forum Admin"

I am not ed arzoian and dont even know him but how is criticzing the CCA defamatory? His posts on the pedal forum simply criticize the CCA and he got banned!!!!!

Fausto Coppied

You should stop guessing.

I do not agree with you about Muenzer not worth getting behind. Not at all.

I do not know Lori Ann personally, as I do many other of Canada's top riders, but from the few interviews I have seen she seemed to do a credible job. If memory serves, I believe she has done some public motivational work.

As for Bill Kinash, if you think he fired me in Hamilton, you are mistaken. Kinash never even bothered goig to hamilton before the World Champoionships. He did not even attend the Canadian National championships there which would have been his first as President. The CCA completely lost control of that event to David Braley and Neil Lumsden who knew nothing about the sport.

I'l give you one example. Lumsden and Braely wanted me to removed ambulances form the race caravan becuase "it doesn't look good". I said there was no way I could do that. The caravan was my responsiblity, the CCA and the UCI require ambulances in the caravan. I told them I woud never sign of on that. the ambulances stayed. They did not understand even the basics of a bike race.

If you think my not being with Hamilton 2003 was a good thing, you are again mistaken. I was the only person looking after the sport of cycling in that organization. Everybody else was lining their own pockets or those of CFL & Hamilton suppliers.

Another example, Lumsden fired me two days before the organization was set to sign a 70-car argreement with Saturn Canada that I had negotiated through Saturn of Ste-Catherines and other local dealers who took it to the head office. The day after Lumsden fired me the deal fell through. Lumsden and Braley were probably happy with that because Braley could then overpay the local GM dealership where Braley bought his Cadillacs to rent cars instead of having them sponsored.

You have no idea of the scams and shams that took place in Hamilton in 2003. They waded throgh $15,000,000 of governemnt funding and left a few crumbs for the sport. I could write a long novel on the scandal.

Nicola_Jam

Is that why CC and Pedal are bannign you? It sounds like they both profit from the worlds so perhaps they are keeping you quiet so you don't spill the beans?

=Fausto Coppied]You should stop guessing.

I do not agree with you about Muenzer not worth getting behind. Not at all.

I do not know Lori Ann personally, as I do many other of Canada's top riders, but from the few interviews I have seen she seemed to do a credible job. If memory serves, I believe she has done some public motivational work.

As for Bill Kinash, if you think he fired me in Hamilton, you are mistaken. Kinash never even bothered goig to hamilton before the World Champoionships. He did not even attend the Canadian National championships there which would have been his first as President. The CCA completely lost control of that event to David Braley and Neil Lumsden who knew nothing about the sport.

I'l give you one example. Lumsden and Braely wanted me to removed ambulances form the race caravan becuase "it doesn't look good". I said there was no way I could do that. The caravan was my responsiblity, the CCA and the UCI require ambulances in the caravan. I told them I woud never sign of on that. the ambulances stayed. They did not understand even the basics of a bike race.

If you think my not being with Hamilton 2003 was a good thing, you are again mistaken. I was the only person looking after the sport of cycling in that organization. Everybody else was lining their own pockets or those of CFL & Hamilton suppliers.

Another example, Lumsden fired me two days before the organization was set to sign a 70-car argreement with Saturn Canada that I had negotiated through Saturn of Ste-Catherines and other local dealers who took it to the head office. The day after Lumsden fired me the deal fell through. Lumsden and Braley were probably happy with that because Braley could then overpay the local GM dealership where Braley bought his Cadillacs to rent cars instead of having them sponsored.

You have no idea of the scams and shams that took place in Hamilton in 2003. They waded throgh $15,000,000 of governemnt funding and left a few crumbs for the sport. I could write a long novel on the scandal.[/QUOTE]