DENVER (BRAIN) — A U.S. bankruptcy judge has approved Giant Group's acquisition of Stages Cycling from Foundation Fitness for $20.1 million. The court approved a purchase agreement that had been opposed by some creditors and an inventor who is in a patent dispute with Stages.
Foundation and associated companies including Stages filed for bankruptcy in Nebraska in June. The Chapter 11 case was later moved to Denver's U.S. Bankruptcy Court.
Giant Group — which has manufactured various products for Stages and Foundation for years — has agreed to drop its suit filed in Oregon, which alleges the brand owes it more than $14 million in unpaid invoices. The court-approved asset purchase agreement includes Giant Group’s move to dismiss the Oregon case; it also includes paying a total of $500,000 from the purchase proceeds to the Norwegian software companies TekSport AS and VismoX AS.
Giant Group said it had acquired Stages' intellectual property, manufacturing facilities, product lines, and limited inventory.
“We are thrilled to integrate Stages Cycling’s assets into our organization,” Donald Yu, the president of SPIA Cycling Inc. said in a press release from Giant Group. “This acquisition aligns with our strategic goals and enhances our capabilities in both indoor and outdoor cycling. We are committed to leveraging these assets to drive innovation and deliver greater value to our customers and stakeholders.”
The company said the acquisition will support its "vision to create a comprehensive indoor/outdoor cycling ecosystem, enhance its cycling data capabilities, and enter the commercial fitness market, where it has a 30-year history of manufacturing for other brands. SPIA Cycling Inc. plans to swiftly integrate the Stages Cycling assets into its operations."
Paddy Murray, VP of Global Sales and Marketing of SPIA Cycling Inc, said, “We’re thrilled about the opportunities this acquisition presents and the benefits it will bring to Stages Cycling’s dedicated customers. Our priority is to ensure a seamless transition while revitalizing the Stages brand to address both current and future customer needs."
Giant had made a stalking horse offer to buy the assets ahead of a bankruptcy auction, but when no other bidders appeared, the court approved its offer on Friday.
In early 2022 Giant Group made a bid to invest in Stages but negotiations fell through before the deal was completed and Giant Group announced in May 2023 that the deal was dead. However, a court filing shows that Giant Group and Foundation continued to negotiate later in 2023 until Stages ended the negotiations, telling Giant Group it was moving forward with another potential acquirer. Early this year, before it filed the Oregon suit, Giant hired several key employees, including Murray, from Stages, which closed its Boulder offices in April.
In bankruptcy court filings this summer, the unsecured creditors committee objected to the purchase agreement terms including the valuation of Stages' remaining inventory and receivables.
The inventor Scott Radow of POWERbahn also objected, saying the Stages assets couldn't be sold to Giant “free and clear” of his patent rights. Radow has previously sued Wahoo Fitness over alleged patent infringement in a case that was settled in 2023. He also was in negotiations with Stages over its SB20 stationary bike, which he said also infringed on his patents. Radow was represented at a court hearing Sept. 12, after which U.S. Bankruptcy Judge Kimberly Tyson approved the purchase agreement. It’s not clear how Radow’s objections were accommodated in the asset purchase agreement and he could not be reached by BRAIN on Thursday. Radow has listed his claim in the bankruptcy case as $5.4 million.
Foundation Fitness remains in Chapter 11 and owes Union Bank & Trust, of Nebraska, about $32 million, with $20 million of that amount secured. Unsecured creditors from the bike industry include Cycling Sports Group (owed $102,000), Backcountry.com (owed $2,750), and Chung Yung Cycle Co. of Hong Kong (owed $3,092). The fitness companies Life Time Group Holdings (owed $2.2 million) and Les Mills International (owed $2 million) also are on the claims register.
