Yes, some of our plans were Cannondale specific and bankruptcy specific. The basic program was as follows:
Utilize the bankruptcy to shed unwanted liabilities and substantial obsolete inventory
Right size the business now that it was no longer associated with the motorsports business
Inject new operating talent into the organization
Develop a new line of tri related products and new line of BMX products
Expand apparel business
Increase international brand building and distribution efforts
As for private equity people that would play in the space:
Pegasus - Owns Cannondale
Chartwell - Owns Richard Childress Racing
Mercanti Group - Likes small consumer distribution businesses
Vulcan - Owns Dick’s Sporting Goods
Leonard Green - Owns Gart Brothers Sporting Goods
This deal would likely be too small for most of those guys. It would need angles. Normally in bike deals you look close to Lance Armstrong’s team, the problem is if your bike can’t be ridden in the tour, those folks tend not to be interested. If you become really seriously we can talk about who to call.
Unfortunately I can’t tell you that without taking a look at the financial statements and inventory levels. However, if you really pressed me I would save somewhere between $5M and $10M – maybe more, maybe less depending on a few things.
One thing I agree with is that Softride has never been that great at publicizing their athletes when they do well. They should have been all over it when Pete Jacobs and Luke Dragstra did so well recently in IM Wisconsin. Most of the bike companies update their websites on a weekly basis (or more if there is important news) & e-mail when their athletes do well, intro new products, etc. Softride takes forever it seems to update their website. Not a reflection on the product, but maybe on the marketing and IT people.
Sounds to me like another classic example of great product, poor marketing. I hope someone snaps them up and reworks the brand. This still is a viable niche for the time being…in the right hands.
As the design is suppose to be more aero than the UCI legal design’s I wondered if they could of offered a rigid design (frame and beam as one piece) - or would this have been stupid? I would have thought that just having no seat tube would have made them more comfortable than most designs with out the need for a pivot on the beam.
Elite used to sell a model that looks like a Softride. I think Dave Greenfield said he licensed it from them. I just checked the website, they no longer offer it (but they are moving into carbon).
What you are suggesting is the Kestrel Airfoil Pro. It still is not a double diamond bike and thus UCI illegal. They need to walk away from any segment where there is even a perceived notion that the customer may want to ride UCI/USCF races and work exclusively on segments where there are no regulation that inhibit use of the beam technology in all events at all times, and really push the product line there.
That pretty well leaves, triathlon, duathlon, bike touring/commuting and perhaps recreational mountain biking. Seems to me that this would be a large enough market to run a viable business, but again, it is crowded with lots of vendors with what I perceive to have lower variable cost structure, due to the fact that their cost structure does not include a suspension mechanism.
The Kestrel really isn’t a rigid version of the softride. They both lack a ST but the kestrel retains the seatstays. Their have been a few designs close to a rigid softride. Greg lemond was working with a Japanese company wayback, Titanflex, Trek Y-foil are close.
When boing said no seat tube, my assumption was that he meant a bike that had all other tubes. Agreed, softride, titanflex etc have no seat tube or seat stays. I liked the Trek Y Foil Design. Personally, I always felt that if you had that design with a few sizes of telescoping aero posts to chose from and three sizes of base frame, then you are good to go.
IP is Intellectual Property. In today’s economy companyies are valued on their IP not on liquid assets. A strong IP can help a company dominate a field. IP can be patents, trademarks, copyrights, and trade secrets. I am assuming Softride’s IP is mainly in their patents. You should note that a patent gives the patent holder the right to exclude others from using their invention. It does not give the patent holder the right to practice their invention. That’s because there may be other patent holders that own rights in the steps or components needed to practice the patent holder’s invention. For example, let’s say I own the patent on a chair and you have a brilliant idea of putting slats on the bottom and making a rocking chair. You file and get a patent on that invention. You can prevent me from making and selling rocking chairs but you cannot make a rocking chair without getting a license from me to the chair. That is why it’s important to do IP due diligence to see what’s there and what’s needed to make use of that IP.
If you guys ever get serious, I am a commercial bankruptcy & insolvency lawyer and do a lot of distressed M&A deals throughout the country. Lemme know.