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Dorel buys PTI Sports assets
Jun '08
Dorel Industries Ltd announced its Pacific Cycle division has acquired the assets of PTI Sports, a leading U.S. designer, manufacturer and distributor of bicycle parts, helmets and other accessories.

The purchase is in line with Dorel's strategy to aggressively grow its bicycle and juvenile products businesses. PTI will be integrated into the Pacific Cycle division within Dorel's Recreational/Leisure segment. The transaction will be immediately accretive to earnings.

The purchase price was US$28.1 million. PTI recorded sales of US$ 65 million and an adjusted EBITDA of US$ 5 million in the 2007 fiscal year.

Established in 1991, PTI Sports has widespread distribution at the key mass and sporting goods retailers throughout North America, including Category Manager positions and 100% exclusive agreements with a number of its customers.

With a dedication to product innovation, PTI's brand portfolio is the strongest in the industry, with such licenses as: Schwinn, Mongoose, Disney, Nickelodeon, Mattel (Polly) Master Lock, Thomas the Train and The Discovery Channel. PTI is the number two North American player in the bicycle helmet market.

Pacific Cycle and PTI Sports began its relationship in 2002 with a license agreement to bring Schwinn and Mongoose branded bicycle parts and accessories to market.

Since then, the ties between the two organizations have developed into a partnership that includes marketing initiatives and product development innovations.

An excellent fit with Dorel's growth strategy:
Dorel President and CEO, Martin Schwartz stated the PTI Sports acquisition underscores the Company's commitment to enhance shareholder value. "We are executing on our plan to focus on and grow our Recreational/Leisure segment.

In February Dorel purchased Cannondale bicycles and SUGOi fitness apparel to augment our position in the independent bicycle dealer (IBD) category.

While this transaction will have little impact on our IBD business, PTI fits perfectly with Pacific Cycle, our mass merchant division, and we can now go to the major chains and offer integrated buying with both bicycles and bike accessories."

There are significant synergies between Pacific Cycle and PTI Sports that will provide a strong foundation going forward.

- In most cases, the same buyers that are responsible for the bicycle category also manage the parts and accessories category. This allows for a more efficient and consolidated sales effort.
- Parts and accessories are a natural extension of Pacific Cycle's current product categories.
- As a division of Dorel, Pacific Cycle has the resources to allow for greater economies of scale, unique technologies and the ability to bring new products to market faster in a wide variety of product categories, including parts and accessories.
- The acquisition of PTI Sports allows for an ease in executing new marketing initiatives between compatible product lines and developing wide-reaching, exclusive programs for key retailers.

"We are excited about this transaction as we will be able to quickly integrate PTI into Pacific Cycle, enabling us to capture and greater leverage our combined synergies, as well as provide additional innovative solutions to our customers. We clearly anticipate upside potential," said Alice Tillett, President of Pacific Cycle.

Dorel Industries Ltd

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