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Hayes Performance Systems buys Reynolds Cycling

Published October 24, 2018
Reynolds carbon wheels will complement Hayes' Sunringlé line of alloy wheels and rims.

SALT LAKE CITY (BRAIN)—Hayes Performance Systems has bought Reynolds Cycling and said it will aggressively offer dealers three levels of carbon wheels with average aftermarket margins of 40 percent.

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Darren Campbell, president of the Hayes Bicycle Group, said the purchase, announced Wednesday, offers the group a complete line of carbon wheels for all types of cycling.

The purchase also bolsters its wheel offerings for OEMs as well as aftermarket sales when combined with Sunringlé, its alloy line of mountain bike rims.

"Reynolds is a leader in the carbon fiber wheel market, with extensive carbon engineering expertise, company-owned manufacturing production facilities, and a premium brand innovation position," said Campbell, a 22-year veteran at Hayes.

Campbell, 44, cut his teeth at Hayes, engineering its first disc brake system for bicycles in 1997. "I put the first production run in the trunk of my car and drove it to Trek," he said.

Hayes has corporate offices in Mequon, Wisconsin, and has offices in Asia and Europe with some 400 employees worldwide. It manufactures brakes, suspension systems, wheels and components for mountain bikes, motorcycles, power sports, the turf care, agriculture and construction markets.

Its other bicycle brands include Hayes disc brakes, Manitou, Sunringlé, Protaper and Wheelsmith.

Scott Montgomery, who managed the sale for Reynolds' owners, will continue with the company. He declined to reveal the price, quipping, "It was a billion dollar sale. It was huge."

Both Reynolds and Hayes are privately held. Maclean-Fogg Investment Partners, a Chicago firm, has owned Reynolds since 2007. The company has deep roots in the automotive and power utility markets.

The company bought Reynolds to learn more about carbon fiber engineering and manufacturing, Montgomery said. Maclean-Fogg has also made carbon fiber hoods for GM's Corvette line of sports cars.

Maclean-Fogg is a privately held company with more than $1 billion in annual revenue. It has offices in Mundelein, Illinois, and employs 3,200 people worldwide. It has 26 manufacturing sites worldwide.

Campbell said Reynolds will continue to build its carbon hoops in China at its factory in Guangzhou. Hayes' Sunringlé factory is nearby. The rims are shipped to Taiwan and laced to hubs with Sapim spokes before shipping to the U.S.

Most of its products coming out of Taiwan haven't been disrupted by the ongoing tariffs. However, tariffs have hit the Chinese-made Sunringlé line. "We will just have to absorb some of that," Campbell said.

Reynolds' top-of-the-line Black Label wheels (29er, 27.5, road and gravel) are spec'd with Industry Nine hubs and retail for $2,099. Its Trail Rated line retails for $1,549, and its entry-level line offers a $1,299 price point.

Montgomery acknowledged that the carbon fiber wheel market is challenging. "But ultra-premium rims from $2,800 to $4,500 has gotten really challenging," he added. From his perspective, cyclists seeking carbon rims are moving away from racing and into the adventure-participation market.

"The weight-weenie segment of the market has cooled off and consumers are looking for performance, and they aren't willing to pay for $3,000 or $4,000 sets of wheels," he added.

QBP and BTI distribute Hayes in the U.S. market; Reynolds sells dealer direct. 

Topics associated with this article: Mergers & Acquisitions

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