Cervélo was a two man start-up company in 1995 and now the bike company is being sold to Dutch conglomerate Pon.
Pon was started in 1895 by Dutchman Mijndert Pon and soon began importing Opel bicycles from Germany. This connection with Germany grew and it started importing Continental tyres in 1920. Today this connection exists even more as it is the main distributor for VW-Audi (Volkswagen, Audi, Porsche, Skoda, Seat) in the Netherlands and it continues to distribute Continental in the Netherlands. It also handles Caterpillar and Man trucks. As well as this it owns several bike brands including Gazelle and is completing the acquisition of Derby Cycles, better known for its Focus brand as used by the Katusha team in 2011, as well as Raleigh and Univega.
Little else is known about the Pon acquisition of Cervélo, simply that the two companies have entered into an exclusive agreement and based on this, it seems highly likely that Pon will buy the company. Normally this sort of holding announcement is released whilst lawyers and accountants are sent in to look at the books and check the contracts. Short of a nasty surprise, Cervélo will become a Dutch brand in early 2012.
Cervélo itself has become a more complex company in the past 15 years. With its Canadian roots, the firm has R&D facilities in California and is registered as a Swiss company. Almost all its frames are made by third party producers, for example by Ten Tech Composites, the Taiwanese OEM with plants in China that also manufactures frames for the likes of Scott and Cannondale, to name just two brands.
Sales have boomed but behind the scenes the ownership has been changing and now it looks like Cervélo will become a Dutch-owned business. A valuable name within the sport for its high-end frames, it seems likely that Pon will look to exploit the premium brand via its sales channels. It could mean the frames become more widely distributed.
I’ll be interested to see how Cervélo fits alongside Focus and whether the company retains its quirky nature and focus on engineering. At fist glance the fear is that the individuality of the company could go as it becomes a brand alongside others, from race bikes to electric shipping bikes. But look no further than Cannondale which belongs to Canadian conglomerate Dorel Industries and sits alongside pushchairs and home furnishings, as well as bike brands like Schwinn and GT and yet retains a degree of independence and continues to develop frames at the cutting edge.
At the margin this is good for the Garmin-Cervélo pro team as the new owner will have deeper pockets and should be keen to promote the brand but that’s thinking too many steps ahead for now. Nevertheless Cervélo’s finances had caused its proprietary “test team” to be merged with the Garmin/Slipstream team for the 2011 season, as a cost-cutting exercise.
Looking more broadly this deals marks another moment of consolidation in the cycle trade where small companies are bought up and become brands within a portfolio. There are now several companies owning a range of brands. Cycle Europe owns Bianchi, Peugot and Gitane; Mavic is part of the same stable as Salomon skis and Wilson tennis rackets; Giro and Bell helmets are the same company. You can see more on the ownership of these brands at the Who Makes What page.
- 20 February 2012: the deal is done and Pon now owns Cervélo.