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SRAM Moves Forward in IPO Process

Published June 25, 2011

CHICAGO (BRAIN)—SRAM has paid off its private equity investor, a step the company previously said it would make before going public.

An updated prospectus filed with the Securities Exchange Commission on Friday indicated that SRAM refinanced its current credit facilities on June 7 in part to complete the buyout of Trilantic Capital Partners.

SRAM paid Trilantic $575 million to regain the shares it owned in the company. Trilantic, then known as Lehman Brothers Merchant Bank, invested $234.8 million in SRAM in September 2008.

SRAM announced last month that it intended to make an initial public offering in order to repay the debt it would take on to buy out Trilantic. At that time, the prospectus said it expected to raise up to $300 million in the offering of common stock.

The updated prospectus doesn’t say when the IPO will be made or the share price, but the company intends to trade on the Nasdaq stock exchange under the “SRAM” ticker symbol.

After the offering, SRAM will liquidate the SRAM Cycling Advocacy Fund, which was capitalized with $10 million receiving after the Trilantic investment. Since then, it has distributed $3 million to support advocacy in the U.S. Europe and Asia. The remaining assets from the fund will be transferred to a new nonprofit called SRAM Cycling Foundation, NFP, which will be dedicated to giving grants to charitable organizations that promote safe cycling and its public health and environmental benefits. The foundation will also continue to support non-charitable advocacy organizations that received grants from the fund.

According to the prospectus, SRAM has continued to see an increase in sales, reporting a 20 percent jump in first quarter sales. Revenue rose to $146.4 million for the first three months of this year, up from $122 million in the same time period last year. OEM sales increased 20.7 percent to $97.7 million, and aftermarket sales increased 18.8 percent to $48.8 million. SRAM’s net sales have increased at a rate of 16 percent annually since 2007, growing from $283.8 million to $524.1 million last year.

—Nicole Formosa

Topics associated with this article: Earnings/Financial Reports

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