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Niner Bikes sells to private investor group to fuel growth, keeps team intact

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Niner Bikes has sold their company to a group of private, Colorado-based investors who will infuse the company with cash to build R&D capabilities and improve competitiveness.

We spoke with Niner president Chris Sugai, who was a co-founder of the company and remains part owner, about the deal. He says the purchase brings on a team of investors who, collectively, have run several major consumer product brands and built them to $100+ million dollar companies. He also shared that while Niner has been profitable for many years, growing off revenues is a slower path than they’d have liked. With competitors like Santa Cruz now accessing deep pockets from PON Holdings (which also owns Cervelo and Focus), this deal will help them grow faster and have more resources at their disposal.

“We’re happy to have a partner that shares our vision for the future, one who enables us to take Niner’s products and services to new heights,” Sugai wrote in a press release about the deal. “I’ll still be directly involved in the day-­to-­day operations, working diligently with our incredible team to explore and push the boundaries of this amazing brand’s potential.”

Sugai told us there’s no interruption to business, bikes are in stock and shipping as normal, and the entire team of employees (at their new headquarters) and outside reps carries over.

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51 Comments
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Colin M
Colin M
5 years ago

I heard that the owners of medical marijuana stores in Colorado were looking for businesses to hide their millions in cash profits. Maybe they found a fun project with Niner?

Mike
Mike
5 years ago
Reply to  Colin M

Umm I think you mean recreational marijuana shops. Either way, that would be a great investment to the owners of the dispensaries.

倪文锋
5 years ago
Reply to  Colin M

really?

Colin M
Colin M
5 years ago
Reply to  倪文锋
Sevo
Sevo
5 years ago
Reply to  Colin M

That industry is so tightly regulated, weed biz, that trying to buy a used Lexus with the cash would be tough much less a bike company

Colin M
Colin M
5 years ago
Reply to  Sevo

LOL that is so not true. We get cash offers on real estate all the time here in Colorado. $400,000 homes….cash offers…think about it. The feds are so stupid to not allow the businesses to not include banking.

Jerry o'Day
Jerry o'Day
5 years ago
Reply to  Colin M

It’s extremely naive to believe all cash offers for real estate in CO come from the weed biz. Plenty of people just have money to spend. For example, recently a house sold near me which was listed at 850k and purchased with a cash offer of 1mil within 5 hours of being on the market. Cash offers well over list price are the norm, has absolutely nothing to do with weed.
Additionally, it’s not as though buying a house is some under the table back alley deal. It’s an incredibly in depth process where every dollar used has to be legitimately accounted for.
Think about it….

Maus Haus
Maus Haus
5 years ago

Niner staff are great people that know their business. Bikes are great and the brand looks as strong as ever. Glad to see they will have additional muscle to push to the next level.

Niner Bikes
5 years ago
Reply to  Maus Haus

Thank you for your support

duder
duder
5 years ago

I hope this enables them to update their geometry to something from this decade. I really want to support a local(ish) brand, but those angles are straight out of 2008.

0gravity
0gravity
5 years ago
Reply to  duder

What are you talking about? Update geometry to something from this decade? New RIP and JET not long low and slack enough for ya? What do you want, a bunch of downhill bikes with 8 inch BB heights? Internet’s full of complainers

Newton
Newton
5 years ago
Reply to  duder

I’m confused too. Maybe “duder” purchase wrong bike for the purpose or purchase a 2008 model?

matt
matt
5 years ago
Reply to  duder

Huh? 0gravity is spot on here. Current geos are very much current.

Sevo
Sevo
5 years ago
Reply to  duder

I bought a Niner RLT 9 RDO because it was up to date in the geo department. Was looking at 3T Exploro & Open UP, but the Niner was lignter, less expensive, and had mounts for fenders and bottle cages.

倪文锋
5 years ago

So,which company is it ?

Jim J
Jim J
5 years ago

I hope they keep the outside sales reps…..but then again we’ve all heard that before from other brands getting purchased.

Niner Bikes
5 years ago
Reply to  Jim J

We have every intention of keeping our awesome rep team intact.

Jet9ner
Jet9ner
5 years ago

Im scared of their lastest warranty policies. Had 3 niners 2 rma cases that didn’t go through…. one was paint discoloration (niner orange) and the actual is a problem with rear triangle cva linkage.

On the past they weren’t that picky about warranties. All maintenances are up to date on a local niner dealer. WTF!

Niner Bikes
5 years ago
Reply to  Jet9ner

Sorry to hear of your experience. We are covering all warranties during this period and will after Jan 2018 when we get out of Chapter 11

Dinger
Dinger
5 years ago
Reply to  Niner Bikes

That ^^ statement doesn’t jive with the statement form the article, below:

“He also shared that while Niner has been profitable for many years, growing off revenues is a slower path than they’d have liked.”

Joey B
Joey B
5 years ago

They should just go consumer direct and be done with it.

Blasphemous
Blasphemous
5 years ago
Reply to  Joey B

They have always been consumer direct.

Kuttermax
Kuttermax
5 years ago

Interesting news and hopefully this helps bring Niner to the next level. I noticed that some of the deep, late season discounts that historically had been offered online on Niner products didn’t materialize this year. I wonder if this had anything to do with the negotiations that led up to this announcement.

EM
EM
5 years ago

Meh their new rigs just aren’t as lust worthy as I once thought they were. I think my next rig will be a Santa Cruz or a Yeti. I had one their scandium air9s that was part of a bad run and the frame cracked. I didn’t like how they handled they wouldn’t warranty it. Really my fault since I even though I bought the frame new and built it myself I bought it from a guy who worked at a shop who bought it for a build he never did, but since I technically wasn’t the original owner I was SOL.

Steevo
Steevo
5 years ago

Meh, more big business bs, who cares. I’d rather support smaller co’s & frame builders

PaulH
PaulH
5 years ago

Will Niner be distributed in the U.K. again?

Niner Bikes
5 years ago
Reply to  PaulH

PaulH we are working on it!!

silverlining
silverlining
5 years ago

Sounds like a big announcement, but odd that the names of the investors or their companies were left out of the article. Hoping for an update or a press release from the investors.

Oh, and Niner e-bike in 3,2,1……

TS
TS
5 years ago
Reply to  silverlining

Quote from the BRAIN article: “With a recapitalized balance sheet, the Debtor will be able to, among other things, hire the engineers and product managers necessary to design bikes for women, to begin offering kid’s models, to create electric mountain bikes, and continue to increase models with different wheel sizes. The Debtor also believes that by enlarging their omnichannel footprint they will be able to increase brand awareness and engagement, ultimately leading to substantial revenue growth.”

Jsdoca
Jsdoca
5 years ago
Reply to  TS

That sounds like the death of a brand if I’ve ever heard one. It’s about money and more money in the owners pockets. Pretty sure there not too concerned with geos.

silverlining
silverlining
5 years ago
Reply to  TS

Thanks for that info. I’m wondering if step one will be finding new offshore suppliers since they are stiffing the current ones they owe money to with Chapter 11.

Doug
Doug
5 years ago

Wonder why the article didn’t mention they filed for Chapter 11 Bankruptcy…

http://www.bicycleretailer.com/industry-news/2017/11/29/niner-files-bankruptcy-ahead-planned-sale#.Wh7dlVWnFQI

Definitely not a lawyer so maybe they had too as part of the new deal with these investors? But it doesn’t sound as cut and dry as a bunch of rich folks gave Niner more money…

Hope they come out stronger on the other side.

hpbiker
hpbiker
5 years ago

They filled Bankruptcy. http://www.businessden.com/2017/11/29/pioneer-29er-mountain-bike-files-bankruptcy-plans-sale-denver-pe-firm/

Wonder if this will let them not honor warranty on past sales. That happened when Schwinn (twice), GT, and Cannondale when they went bankrupt.

Hope for the best.

MG
MG
5 years ago

More details for those interested…including the bankruptcy filing, the name of the investment group, etc.: http://www.bicycleretailer.com/industry-news/2017/11/29/niner-files-bankruptcy-ahead-planned-sale#.Wh7qULQ-dug

Dude
Dude
5 years ago

Great job company founders!

Crash Bandicoot
Crash Bandicoot
5 years ago

Aren’t they bankrupt? I wonder if the IP will just be sold to some bigger players.

Colin M
Colin M
5 years ago

Do you really know what bankruptcy under Chapter 11 means? You should research it to understand.

Bob
Bob
5 years ago

So if you file for Chapter 11 and then sell, does the new owner get to avoid paying all the old owners debt?

Ben
Ben
5 years ago
Reply to  Bob

Yes, that’s the whole point of filing for bankruptcy, clean off the liability and rake up the newly raised capital, say what you want about this, but Chris Sugai is smart.

Reformed Roadie
Reformed Roadie
5 years ago
Reply to  Ben

Is it smart to name your company after a wheel size? About 6 or 7 years ago, at least a third of the riders locally were on Niners…now…not so much.

Bob
Bob
5 years ago
Reply to  Ben

if by smart you mean being a complete slim ball piece of shit they yeah i agree. he is smart. another really good way to raise capital is stealing from old people. they don’t even have the ability to chase you down. very little effort and a great way to raise capitol. if you don’t have a soul

Niner Bikes
5 years ago
Reply to  Bob

Bob,

I think you have a misconception on how Chapter 11 works.

Wikipedia-

“It follows that it may be more economically efficient to allow a troubled company to continue running, cancel some of its debts, and give ownership of the newly reorganized company to the creditors whose debts were canceled. Alternatively, the business can be sold as a going concern with the net proceeds of the sale distributed to creditors ratably in accordance with statutory priorities. In this way, jobs may be saved, the (previously mismanaged) engine of profitability which is the business is maintained (presumably under better management) rather than being dismantled, and, as a proponent of a chapter 11 plan is required to demonstrate as a precursor to plan confirmation, the business’s creditors end up with more money than they would in a Chapter 7 liquidation.”

ATL
ATL
5 years ago
Reply to  Niner Bikes

Niner’s assets exceeded its liabilities and it has been profitable, yet the creditors don’t get 100% of their money. Is that a correct interpretation?

Tristan
5 years ago
Reply to  Niner Bikes

So @Niner Bikes are you saying that ALL debts and money owing will be paid?

hpbiker
hpbiker
5 years ago
Reply to  Bob

They will just be like the bankrupt Schwinn, GT and Cannondale from days gone by. When they went bankrupt the warranties went out the door.

Also remember when Schwinn/GT did the same thing when they went bankrupt. They planned to sale to Huffy with a stalking horse bid. Well that did not work out for Huffy/Schwinn/GT and Pacific/Nautilus bought Schwinn/GT. So until the “gavel” hits the bench this is far from over. Who says Huffy, Pacific, Giant, etc…. will not buy them?

Mark
5 years ago

They should totally rebrand. If they are making more than 29ers, the company name is just not a good choice. I personally went through too many Niners, I think they failed for a reason.

Johnny
5 years ago

I hope they get motivated to fix their paint. Almost every Niner I see has the paint flaking and chipping off from around the dropouts (on a TA no less). My wife’s Niner One 9 RDO looks like it was drug behind the car, but it’s just poor quality paint…

silverlining
silverlining
5 years ago

Tyler, I think most readers would appreciate a follow up or more detailed story on just who Columbia Basin Partners really is and their track record with previous purchases. Private Equity groups are about one thing: profit. That in of itself is fine, but I’ve seen more than a few PE make promises to employees and customers then completely destroy the newly purchased firm until there’s nothing left. Then they just move on to the next acquisition.

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