Did I miss this over here? I knew that rumors were afoot about a possible sale, but he word on the street is that it is now a done deal.
I don’t know. Ask Craigster. Or maybe look here:
http://forum.slowtwitch.com/gforum.cgi?post=1483963;search_string=rumors%20about%20zipp;#1483963
That’s the word.
Does anyone have a link?
Personally I think this is a great idea. It gives a smaller company more resources to develop even more top flight products. I really can’t see a downside.
Bob
It has a lot of upsides. Be interesting to see if production stays in Indy or not if it happens.
I wouldn’t see what not. SRAM is based out of Chicago, right? Plus, one of the key marketing concepts Zipp states is that their wheels are built by hand in Indy. Jsut my two cents worth, but I’m no marketing/business guru.
Bob
… I really can’t see a downside.
There is a huge downside. Zipp as we know it will cease to exist. SRAM will be looking to recoup their investment and that means Zipp will be run differently. It could mean less trips to the wind tunnel or less product introductions. It could mean Josh and the other bright people of Zipp leave the company.
I think if SRAM buys Zipp it will be a sad day for Zipp.
… I really can’t see a downside.
There is a huge downside. Zipp as we know it will cease to exist. SRAM will be looking to recoup their investment and that means Zipp will be run differently. It could mean less trips to the wind tunnel or less product introductions. It could mean Josh and the other bright people of Zipp leave the company.
I think if SRAM buys Zipp it will be a sad day for Zipp.
I completely disagree. For one SRAM has never stopped innovating with the companied they own. Rock Shox was in the toilet when they bought them, and now they are at the top. Avid has absolutely, and went from being a mechanical brake company to one of the leaders in disc brakes. SRAM has done things that made shimano scramble to keep up…notice the sudden appearance of carbon everywhere in the Shimano line X.O was toasting XTR. For all we know it could mean more wind tunnel time, a more streamlined production. SRAM isn’t going to buy a company and then run it into the ground especially in the wheel market, it’s probably the most competitive part of the industry.
This is also something the leadership at Zipp have been trying to pull off for a while, zipp has been actively looking for a buyer for a long time now.
Well, that might be, but maybe Josh and others get more resopurces each year to develop more products. Sure, maybe more flashpoint stuff comes out (Anyone complain about that?) and perhaps other things, but Zipp as we knwo it isn’t going anywhere. Why would you pay good moeny for a top end brand and then take it into the dumps, especially when you are intent on crushing the leaders (Shimano and Campy) in the bike industry.
Bob
Zipp is seen as a market leader in wheels and to remain there you must constantly innovate and provide products your customers want and ideally will pay a premium to purchase. SRAM has deeper pockets and could better fund R&D efforts leading to even better products. Since SRAM is private (no clue what, if any, private equity is involved) I think there is less potential for the finance guys to run the company.
Based on SRAM’s history of acquisitions I would hope they can implement best practices and better position Zipp for the next 5 years.
And since (IIRC), Sram doesn’t have a line of wheels, but Shimano and Campy both do, this is a quick way for Sram to get into the component wheel market. Similar to Easton buying Velomax. Now, what that means for FP, Ritchey, Cane Creek, et. al., I don’t know. Will Sram allow them to re-sticker rims? Will Zipp make some non-carbon rims for other uses?
Here is the press release from SRAM and Zipp:
September 21, 2007
For Immediate Release:
SRAM and Zipp announce that they have signed a Non-Binding Letter of Intent for SRAM to
acquire Zipp. The acquisition is expected to be completed within 60 days.
Stan Day, CEO of SRAM says: �Zipp is a great company and respected brand, with a strong
management team, advanced technology and superb manufacturing capability. We look forward
to bringing both successful companies together and synergistically delivering a growing strategic
range of products to our customers.�
Andy Ording, President of Zipp says: �Zipp has remained focused on market defining technology
development in advanced composites and aerodynamics. After nearly two decades of carbon
product manufacturing the SRAM opportunity provides additional horsepower and improved
global market leverage. SRAM has a fine reputation for acquisitions and culture integration,
affording us the opportunity to broaden our foundation on which the Zipp team can build for the
long term.�
Operational plans will be finalized and announced when the acquisition is completed. Those
plans will include:
- The Zipp management team will remain intact and continue to report to Andy Ording.
Andy will report to Stan Day. There will be no layoffs as a result of the transaction. - The current high-tech Indianapolis location will remain the manufacturing center for Zipp
wheels and components. - The Zipp product warranties will be honored and continue to be serviced in the
Indianapolis facility. - The Zipp distribution network will be maintained.
- All Zipp contracts and business relationships will be honored.
Isn’t the Zipp/Hed toroidal rim patent set to expire in the next couple of years? If so, that would be a terrific incentive for the owners of Zipp to sell given its higher US-based manufacturing costs, at least compared to the “made in china” wheels that would be free to clone the toroidal rim shape. I think SRAM does much of its manufacturing overseas, but I could be wrong. Then again, if the dollar keeps dropping, those made overseas products might not be so inexpensive anymore when compared to the “made in the USA” label.
Also, I was under the impression that companies who heavily invest in R&D and have new innovative products in the pipeline have an incentive not to sell because the owners know the potential future revenues make the company more valuable than its present balance sheet. At least this is the case with publicly traded companies. Maybe Zipp and SRAM factored this into the sale price?
“I was under the impression that companies who heavily invest in R&D and have new innovative products in the pipeline have an incentive not to sell because the owners know the potential future revenues make the company more valuable than its present balance sheet.”
It’s all about valuation, and there is no more certain way to value a company (at any given moment in time) than to have a willing seller and a willing buyer agree.
Haim
It’s all about valuation, and there is no more certain way to value a company (at any given moment in time) than to have a willing seller and a willing buyer agree.\\
Nail on the head there. It is the truth that all deals boil down to. No pie in the sky, what ifs, maybes, could bes, ect., ect. I don’t know how many times I’ve told people that your shit is only worth what someone will pay for it, today…
“I don’t know how many times I’ve told people that your shit is only worth what someone will pay for it, today…”
I tell people this all the time. Seems in real estate so many owners/sellers don’t get this point in the least.
Thanks for the press release, but it doesn’t answer the important question on the minds of all ST — Are they going to change the decals?
Man, I don’t want my ride to look dated. 
It has a lot of upsides. Be interesting to see if production stays in Indy or not if it happens.
It most likely will. When they bought Rock Shox they didn’t change anything in CA side. Sram HQ is in Chicago thats all.
Perhaps the purchase will allow Josh to utilize his composites expertise and spend some time in the San Luis Obispo facility of SRAM?
P.S. - yes, SRAM has been trying to hire a composites engineer out of the San Luis Obispo location for months. I don’t know if they ever filled it, but it seems that it was still open about a month or so ago.