Halfords pays £18m to pull Wheelies
HALFORDS has agreed to pay at least £18.4m to buy two cycling brands as it deepens its involvement in the cycling market.
The Redditch-based group has bought online bike and cycling parts retailer Tredz and its sister company Wheelies, which is the UK’s largest provider of bicycle replacement for insurance companies.
The businesses employ 250 people in South Wales and combined generated EBITDA, a measure of profitability, of £2.4m on turnover of £32m in their 2016 financial year.
Jill McDonald, chief executive of Halfords, said they “continue to believe in the long-term growth potential of the cycling market”.
She said: “We are delighted with this acquisition, which we believe is a strong and complementary addition to the group, extending our presence in the online market for premium bikes, parts, accessories and clothing.”
Tredz and Wheelies have been sold by the founders Keith and Michael Jones, but will continue to trade as standalone businesses and be led by Keith Jones and the existing management teams.
Group managing director Keith Jones said: “We are very proud of the businesses that we’ve grown from a small shop twenty seven years ago into a strong operator in the premium cycling market, with a team of over 250 people.
“However, the time has come for us to work with a partner on the next phase of growth. Halfords is exactly what we were looking for. With the support and resources of a large group, we look forward to building upon what we have achieved so far to drive long-term growth.”
Halfords will pay £18.4m in cash, from its existing borrowing facilities, with a further payment due dependent upon the financial performance of Tredz in its 2017 financial year, which runs to Feburary 28 next year.
