By Matt Wiebe and Stephen Frothingham
DENVER (BRAIN) — After an eventful few months, Niner Bicycles has been purchased by UWHK Ltd., an investment firm that also owns Huffy Corp. A U.S. Bankruptcy Court judge approved the sale last week and the purchase closed Friday afternoon.
Niner co-founder Chris Sugai will continue to lead the company, which will remain headquartered in Fort Collins, Colorado. He said the reborn Niner is already looking to hire several positions in engineering and marketing.
"We are celebrating," Sugai told BRAIN on Friday. "We'll party a little tonight, and then it's back to work on Monday."
UWHK Ltd. was formerly Emersion International, a Hong Kong-based entity that agreed to buy Niner late last month. UWHK is an investment firm in premium global outdoor brands and a division of United Wheels Ltd. United Wheels is the majority shareholder in Huffy Corp.
"We will have common ownership with Huffy, but we are not the same company," Sugai emphasized, comparing the relationship to Pon's ownership of multiple brands including Cervélo and Santa Cruz, or Dorel's ownership of mass-market bike brands as well as Cannondale.
Niner filed for Chapter 11 bankruptcy in late November, listing assets of $9.8 million and liabilities of $7.9 million and with plans to sell its assets to a Colorado investment group. However, that group stepped aside when at least two new bidders emerged. Among the new bids was an offer from a group led by Tony Karklins, the co-founder of Allied Cycle Works.
On Feb. 20, Sugai announced that Emersion had agreed to buy the company. Emersion was described then as "a global holding company of outdoor brands." The company's ties to United Wheels and Huffy were not disclosed publicly until Monday.
Sugai said Niner will be free of the debt that has held it back in recent years, and will be able to invest more in R&D and marketing. He said the company remains committed to sales through specialty retailers and will soon roll out new dealer programs. "We are going to make it easier for shops to do business with us," he said. Growth in international distribution is another priority, he said, along with continued support of trail advocacy efforts.
He declined to say what sort of new products are in the pipeline, but said the brand will show several new things at the Sea Otter Classic next month.
In a statement, Sugai said, "We are in-step with the vision and fast-track global plans for Niner. Our leadership team and culture, which are synonymous with our brand, will be maintained. ... UWHK's support allows the dedicated team at Niner to keep producing high-quality bikes."
"I got into this business because of my passion for all things cycling and I'm glad we can get back to making awesome bikes. ... Supporting riders and giving back to the riding community will continue."
United Wheels Ltd. also owns Allite Inc. and VAAST Bicycles, two new brands to be launched later this year. The company is not revealing details of the two new companies, but said each company, including Niner, maintains separate operations.
Bruno Maier, the managing director of new business for United Wheels, said, "Acquiring Niner represents important opportunities for UWHK and Niner. ... With UWHK's support, Niner can focus on quality off-road product R&D and effective strategies to maximize gains."
Maier is a bike industry veteran who has worked for Pacific, Cannondale, PeopleForBikes and RockyMounts. He left RockyMounts last year to take a position with United Wheels in Ohio.
In an interview with BRAIN on Friday, Maier said United Wheels is a Chinese and Hong Kong investment group focused on bicycles. He said United Wheels plans to expand into other outdoor recreational and sports products though high-end brand acquisition. United Wheels owns the Bailey bicycle factory in China where many Huffy bicycles are made. Like Sugai, Maier emphasized that Niner will not become a division of Huffy — the two companies simply have the same owner.
“Chris and his team have built the culture and the bikes that have carved out an important place in the high-end market. Unfortunately, they ran into financial difficulties," Maier told BRAIN.
“Our investment puts those money problems behind them, freeing them to push their vision forward. While we want them to be efficient (and) frugal, we are investing heavily in R&D to get them back into the market with new product as quickly as possible. We also feel Niner has untapped potential in many global markets that they were unable to enter because of cash flow. With our investment and logistical support, Chris and team can now expand internationally.
“Other than our cash infusion, we are keeping our hands off," he said. "There will not be any personnel changes, they will continue using the same vendors they always had, and no one is moving."
In a statement, the companies said they were not releasing financial information about the sale. The court-approved sales agreement last week set the price at $3.1 million cash and the assumption of liabilities. The agreement called for the buyer to pay off a debt to PMC Financial of about $2.75 million and pay West Town Bank & Trust $300,000 toward a loan with that bank.
Related stories
- Investment firm, Emersion, agrees to buy Niner Feb. 20, 2018
- Niner files for bankruptcy protection ahead of planned sale Nov. 27, 2017
- Colorado investors agree to buy Niner Nov. 27, 2017
- Former Niner president Mike Gann joins Look Cycle Group Nov. 13, 2017
- Niner adds reps, opens factory store in Colorado April 19, 2016
- Sugai tells Wall Street Journal he foresees growth Jan. 5, 2015
- Left behind, a mystery tool's purpose is finally revealed Oct. 22, 2014
- Niner co-founder Steve Domahidy launches new brand on Kickstarter Feb. 19, 2014
