Editor's note: This article is corrected to clarify that Zhonglu did not acquire a majority share in Factor.
TAICHUNG, Taiwan (BRAIN) — China’s Zhonglu Co, through one of its subsidiaries, has acquired a 21% share in Factor Bikes while a private equity firm that includes Factor CEO Rob Gitelis also has made an investment. Together the two entities have acquired a majority share in Factor from exiting non-management shareholders, the company told BRAIN.
Shanghai Stock Exchange filings confirm the investment and Forever Bicycle, a brand owned by Zhonglu, announced the change on its website on Friday.
“We have joined hands with international top players to reshape the landscape of high-end road bikes in China! Important official announcement! Forever's parent company Zhonglu shares jointly holds 52.87% of the shares of the world's top bicycle brand Factor! This is a milestone strategic marriage in the Chinese bicycle industry, and it is also a strong layout for the future cycling ecology!” reads the announcement on the Forever site, in a Google translation.
Factor dates to 2008 when it was started as a project by a British Formula 1 racing company. It has been owned and led since about 2016 by Gitelis, an American former road racer who has lived in Taiwan for decades and run several factories specializing in carbon fiber frame manufacturing for major brands including Cervelo.
Factor has a factory in Taichung and one in China, Gitelis told BRAIN during a tour of the Taichung factory during the Taipei Cycle show several years ago.
Factor has sponsored World Tour road teams including the Israel Start-up Nation team. Tour de France winner Chris Froome invested in the company in 2021. Factor is the parent of the Black Inc. carbon component brand.
Forever dates to the 1940s and is one of the oldest bike manufacturers in China.
According to a filing with the Shanghai Stock Exchange, two groups — Zhonglu Advantage Global Investment Co., Ltd. and VSI Cycling Limited — invested $15.26 million and $22.9 million to acquire 21.15% and 31.72% of Factor, respectively.
“By investing in (Factor) … the goal is to achieve optimization and integration of resources,” reads a translation of the filing.
“On one hand, the company hopes to form the technological capability for independently developing internationally top-notch carbon fiber bicycles through subsequent cooperation, thereby promoting market expansion for high-end carbon fiber bicycle categories. It also aims to leverage the symbol company's mature sales network and marketing system in overseas regions to facilitate the export of high-end models from the permanent brand (Forever) and promote national brands entering the international market. On the other hand, the company can extend and integrate the bicycle Industry Chain such as parts manufacturing, sales channels, and event operation, exploring more profit points and striving for diversified revenue growth, which has significant strategic importance for enhancing the overall competitiveness of the company,” the filing continued.
