Deal Announcement 03/23: Retail & Consumer

The Deal

The PwC M&A team is pleased to announce the successful sale of the Prophete and Cycle-Union Group (“PC Group”) to DuTech Holdings Ltd. (“DuTech”).

PC Group comprises of Prophete GmbH & Co KG (“Prophete”) and Cycle-Union GmbH (“CU”). Prophete, headquartered in Rheda-Wiedenbrück, Germany, is a market leader in the sale of bicycles, e-bikes and accessories to discounters and DIY-stores in the lower price segment. The products are mainly sold under the Prophete brand.

Cycle Union, headquartered in Oldenburg, manufactures bicycles, trekking bikes, e-bikes and city bikes of the brands Kreidler, ebm e-bike manufaktur and vsf fahrradmanufaktur. The products are mainly sold to specialized retailers and stores in the medium and premium price segment. In the financial year 2021/2022, PC Group generated net sales of about €156 million.

Due to supply chain disruptions which led to high fluctuations in working capital and a strong liquidity need, PC Group had to initiate preliminary insolvency proceedings on 21 December 2022. Attorney at law Manuel Sack (Brinkmann & Partner) was appointed as preliminary insolvency administrator by the local court. The preliminary insolvency administrator immediately initiated an international M&A process that has been led by the Distressed M&A experts of PwC. 

Despite the very ambitious timeline, PwC has been able to keep a fierce competition between several interested investors until the signing of the transaction. DuTech finally won the race with the most attractive offer.

With a focus on environmental and green technology, DuTech has invented many applications and won several green technology awards. The acquisition of PC Group will further raise the profile of DuTech's green technology products. By providing PC Group with its manufacturing and supply chain expertise, DuTech will significantly increase the group's future profitability and growth power.

The transaction was signed on 2 March 2023 and was closed on 18 March 2023. All 400 employees of PC Group were taken over. 

PwC advised the insolvency administrator with its in-depth distressed M&A expertise. The signing of the deal took place only 2 months after the kick-off of the M&A process.

Prophete and Cycle Union

Prophete is a driving force in the two-wheeler industry and an innovation leader in the areas of discounter, DIY markets and online retail. Prophete products have been impressing customers for decades with their maximum reliability, modern components and contemporary design. From city bikes to trekking bikes, MTBs/ATBs, e-MTBs and e-bikes to bicycle locks or saddle protectors: Prophete models and the extensive range of accessories move generations with high quality at attractive prices. Cycle Union manufactures bicycles, trekking bikes, e-bikes and city bikes of the brands Kreidler, ebm e-bike manufaktur and vsf fahrradmanufaktur.

DuTech Holdings Ltd.

DuTech is a leading global developer and manufacturer of security products with over 2,600 employees in Europe, North America and Asia. In Germany, DuTech already employs 800 people. The DuTech Group generates an annual turnover of 300 million euros, among other things with e-bike components. It was included in the Forbes list of the 200 best Asia-Pacific companies. Headquartered in Singapore, the group is owned by US entrepreneur Dr. Johnny Liu.

Brinkmann & Partner 

Attorney-at-law/specialist lawyer for insolvency law Manuel Sack has been working as an insolvency administrator for 25 years and has extensive experience in corporate reorganisations in insolvency. His proceedings and restructuring successes include the HEROS group of companies with almost 5,000 employees, the Dailycer Group, Arbeiterwohlfahrt Gesundheitsdienste GmbH and the kitchen manufacturer Poggenpohl Möbelwerke GmbH as well as numerous other companies.

Brinkmann & Partner was founded in Hamburg in 1980 and is now represented by 30 offices in all economic centres of Germany. Particular emphasis is placed on personal on-site support for clients by a partner and his or her team. Through its entrepreneurial approach, Brinkmann & Partner has earned a leading reputation in corporate restructuring and is one of Germany's largest insolvency administrator firms with over 20 administrators.

PwC

The global PricewaterhouseCoopers network is a worldwide association of independent auditing and consulting companies which together employ almost 328.000 employees in 152 countries (“global PwC-Network. Our global network comprises over 3,700 deal professionals all over the world, realising approx. 700 successful transactions per year. Our Distressed M&A team led by Timo Klees (Partner) is market leading in Germany and has successfully advised on more than 70 transactions out of special situations and insolvency situations in recent years. Latest transactions include among others IBEO, Ludwig Pfeiffer, Lechner, scanplus, Nobiskrug, Aluminium Rheinfelden, Poggenpohl, Dradura, Fintyre, Thomas Cook and Vapiano.

The transaction team included Timo Klees (Partner), Fabian Dalka (Senior Manager), Julia Jaumann (Manager) and Thorsten Schneider (Associate).