Chicago-based bicycle component maker SRAM and Lehman Brothers Merchant Banking (LBMB) have completed their strategic investment transaction, giving LBMB a 40 percent stake in the company for a reported US$200 million.
“Getting to the finish line, given the current state of the financial markets, is a reflection of LBMB’s role as one of the leading private equity organizations in the middle market and our strong SRAM management team,” said Stan Day, chief executive of SRAM.
As a result of the transaction, LBMB managing directors Charlie Moore and Bill Lovejoy will join the SRAM Board of Directors. The SRAM management team remains intact.
“All of us at LBMB are thrilled to be closing our investment in SRAM," Moore said. "The company is a leader in its industry with tremendous momentum and a bright future. We look forward to working with SRAM’s management team to build the business and realize its full potential in the years to come.”
Prior to the completion of the transaction, seven-time Tour de France winner Lance Armstrong confirmed his return to the sport of bike racing with the SRAM-supported Team Astana. Additionally, Armstrong has made a meaningful passive investment alongside LBMB to further strengthen his ties with SRAM, said to be in the millions of dollars.
Armstrong’s use of SRAM components will become a part of the SRAM overall marketing program. He will also serve as a technical advisor for SRAM’s product development teams alongside many of SRAM’s other established professional riders.
“The entire organization welcomes Lance to the SRAM team," Day added. "We are looking forward to his input and doing everything we can to support his return to racing."
Headquartered in Chicago, with product development and manufacturing facilities in California, Colorado, Indiana, Taiwan, China, Germany and Portugal, SRAM produces a full line of high performance bicycle components for original equipment manufacturers and independent bike dealers. SRAM markets its products under the SRAM, RockShox, Avid, Truvativ, and Zipp brand names. In business since 1987, SRAM expects 2008 revenues to approach US$500 million.
For an exclusive video interview with SRAM's Stan Day, click here.
American anti-doping agency keeping tabs on Armstrong
The United States Anti-doping Agency (USADA) says it is up to the International Cycling Union (UCI) to determine when Lance Armstrong will be eligible for competitive racing.
USADA confirmed to Agence France-Presse (AFP) on Tuesday that Armstrong's six-month probation period officially began in August when the seven-time Tour de France winner registered with their drug-testing programme.
"The issue of eligibility is set by each sport," said USADA spokesperson Erin Hannan. "He has been in the (testing) pool since August 1."
Armstrong needs to be included in USADA's testing pool for six months before his cycling comeback becomes official, meaning he won't be allowed to race until the beginning of February.
But Armstrong is hoping for an early return to compete in January's Tour Down Under in Australia. Hannan said Armstrong must check in with USADA on a regular basis.
"He requested to be reinstated into the out of competition testing pool and submitted his whereabouts to us," Hannan said. "There is no advance notice. He needs to be available."
Hannan said she didn't know if Armstrong had been tested already or if there was a minimum number of tests an athlete must undergo during the six-month probation.
News of his return has drawn mixed reviews in cycling circles.
Armstrong has been accused of doping practices on several occasions, most notably in an article in French sports newspaper L'Equipe in 2005, claiming six urine samples from his 1999 Tour victory contained the blood-boosting drug EPO.
The rider himself has always denied doping and the UCI cleared him in 2006.
© BikeRadar & AFP 2008