BY MATT WIEBE
Even Shimano American’s president, David Pfeiffer, described Nautilus’ auction process as a bit rushed and that Shimano and Pearl Izumi executives are still thrashing out some minor details.
Nautilus’ rush to close the deal may have gotten a push after the fitness company on Feb. 15 defaulted on payments to Bank of America. The bank gave Nautilus a breather to complete the Pearl Izumi sale before addressing its late payments.
“Nautilus’ decision to sell Pearl Izumi had nothing to do with the company’s performance; we are not buying a turnaround company,” Pfeiffer said. “They have a solid plan in place and we see great potential for the future,” he added.
Shimano American paid $69.5 million for Dash America, Pearl Izumi’s parent company in the United States—$65.3 million in cash and assumption of $4.2 million in long-term debt.
Shimano American’s acquisition includes Pearl Izumi’s facilities in Broomfield, Colorado, and Kirchzarten, Germany, and the rights to sell and distribute Pearl Izumi throughout North and South America, Europe, Australia and other countries.
However, it’s barred from sales and distribution in Japan and most of Asia. Those rights are held by Pearl Izumi Japan.
Shimano American bought the U.S. company—not Shimano Japan. Pearl Izumi joins Shimano’s other North American businesses including Shimano bicycle and fishing with offices in Irvine, California, Shimano Canada, G. Loomis and PRO cycling accessories.
Pfeiffer said Pearl Izumi would remain a standalone company with its own management team. As part of a broad dual-brand strategy, Shimano will continue selling its branded apparel and cycling footwear along with Pearl Izumi products in all markets.
“Take G. Loomis as an example of what stand-alone means to us,” Pfeiffer said. “We have owned them for 10 years now, but most people would not know that because we treat it as a stand-alone company.
“And though G. Loomis makes fishing rods, and Shimano makes fishing rods, we do not make any Shimano rods in G. Loomis’ factories, but we do share engineering and technology,” Pfeiffer added.
Shimano American does slightly more in fishing sales in North America than it does bicycle product sales. The Irvine company distributes all of Shimano’s shoes and wheelsets in North America. Pearl Izumi will be a substantial boost to its business.
“The sale process allowed us to establish Shimano as the ideal partner for Pearl Izumi. There simply wasn’t a private equity buyer that could come close to offering the benefits, strength and long-term stability that Shimano does for the Pearl Izumi brand,” said Juergen Eckmann, Pearl Izumi’s president.
Two business entities share the Pearl brand—Dash America, the Colorado company, and privately held Pearl Izumi Japan. Pearl Izumi is the No. 1 brand in Japan and Asian markets. The United States is the Colorado company’s single largest market, but there has been substantial growth in Germany, United Kingdom, Italy, Canada and Switzerland.
“We are fortunate to be able to make long-term decisions now and maintain our focus on the specialty channel of distribution, product innovation, and enhance our consumer communications,” Eckmann said. The purchase also got a nod from Pearl Izumi employees, who were delighted when they caught wind of the transaction.
Pearl’s Colorado development and prototyping facility manufactured several demanding items for the Slipstream Chipotle team, including speed suits the team used during the Tour of California. They were developed after extensive wind tunnel testing.
Shimano Europe recently added Pro cycling accessories, Shimano clothing and sunglasses to its businesses. In purchasing Pearl Izumi, Shimano American steps up the size of its North American business in a similar manner.