SRAM sells minority stake to Lehman Brothers Merchant Banking

By James Huang, Technical editor | Thursday, August 7, 2008 3.11pm

SRAM has announced today a “equity partnership” with Lehman Brothers Merchant Banking (LBMB), a division of global private equity business Lehman Brothers.  

According to a SRAM press release, LBMB will be a minority investor and current SRAM senior management will remain in place and retain their current capacities. Chicago-based SRAM projects 2008 revenues to approach half a billion dollars and the transaction is anticipated to close in late September.

“The SRAM team has done a great job building a global organization in an exciting industry,” said SRAM chief executive Stan Day, who is also one of the company’s founding members. “We've now achieved a scale where we believe it's prudent to add an experienced institutional investor to our shareholder base. We're very pleased that LBMB is committing its capital and expertise to SRAM.”

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SRAM owns the RockShox, Zipp, Avid, and TruVativ brands, and entered the road component market in 2006.

“SRAM has grown to become a true leader in its industry without losing touch with its entrepreneurial roots and its core values,” said Charlie Moore, LBMB managing director. “We're privileged to partner with Stan Day and the SRAM management team as they build on the company’s strong momentum in the bicycle components market.”  

SRAM will also establish the SRAM Cycling Advocacy Fund to support advocacy in the U.S., Europe and Asia on policy issues affecting cycling infrastructure and the bicycle industry. The fund will initially be capitalized with US$10 million and will be paid out approximately $2 million per year for five years based on advice from established advocacy groups such as Bikes Belong.  SRAM expects to have a grant request process in place by this November and additional details will be available in approximately 60 days.

“Bikes are a constructive transportation and recreational solution,” said Day. “Governments everywhere are recognizing their value to address traffic congestion, environmental concerns, health promotion and high gas costs. The fund will support grass roots advocacy efforts focused on improving cycling infrastructure.”  

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