Fox Factory To Buy Race Face And Easton Cycling For $30 Mln, Plus Milestones

(RTTNews) - Fox Factory Holding Corp (FOXF) Friday agreed to buy substantially all the assets of the Race Face and Easton Cycling businesses, formerly Race Face Performance Products Inc and 0999324 B.C. Ltd.

FOX will buy Race Face/Easton in an asset purchase transaction for about $30.2 million. The deal was financed with debt and includes a potential earn-out opportunity of up to a maximum of $17.4 million payable over the next two fiscal years contingent upon the achievement of certain performance-based financial targets.

Race Face/Easton makes high-performance mountain and road bike wheels and other high-performance cycling components including cranks, bars, stems, and seat posts, globally to OEMs and the aftermarket.

The deal is part of efforts to increase product penetration into both existing and adjacent product categories to help drive long-term bike sales and profitability, said Fox CEO Larry Enterline.

On a combined basis, Race Face/Easton generated about $23.6 million in sales and Adjusted EBITDA of about $4.3 million in its fiscal year ended October 2014.

FOX expects Race Face/Easton revenue growth in the high single digit range, and expects to invest in Race Face/Easton to strengthen its infrastructure and maximize the long-term potential of the business.

The company anticipates the transaction to close by the end of 2014.

Headquartered in Scotts Valley, CA, FOX makes high-performance suspension products primarily for mountain bikes, side-by-side vehicles, on-road and off-road vehicles and trucks, all-terrain vehicles, snowmobiles, specialty vehicles and applications, and motorcycles.