The investor Finatem is once again bringing a company with a two-wheeler focus to the parquet: the transmission manufacturer H-Gears. This primarily wants to grow with e-bikes.
WITHn years after Derby Cycle, the largest German bicycle manufacturer at the time, went public, the financial investor Finatem is once again bringing a two-wheeler-related company onto the floor. The transmission parts manufacturer H-Gears is to be listed on the Frankfurt Stock Exchange in the current quarter. According to reports, this company achieves almost a third of its sales in business with the bicycle industry and wants to expand the division significantly. The “stock market story” obviously consists of the fact that the company wants to benefit from the continuing rise of e-bikes, that is, bicycles with an electric auxiliary motor.
To a large extent, H-Gears stands for an industry that offers investors little choice in the stock market. In Germany it is diverse, but shaped by small and medium-sized bike manufacturers and suppliers. Investors hardly enjoyed the pioneer share of Mitteldeutsche Fahrradwerke (Mifa). The company filed for bankruptcy twice. On the other hand, those who took advantage of the second major bicycle IPO in 2011 and invested in Derby Cycle early on took high profits. The manufacturer of “Kalkhoff” and “Focus” quickly rose to the S-Dax index for small stocks, but was taken over by the Dutch family company Pon after a year and disappeared from the price list.
Across the border, private investors can access the Dutch Accell, like Derby Cycle, a little-known holding name behind which well-known brands are hidden. With Batavus, Sparta, Winora and other vehicles, the company claims to be Europe’s largest supplier. The share – listed in Amsterdam in the AScX segment – has risen by two thirds since the beginning of the year. The cycling industry benefits from the fact that, during the Corona crisis, many citizens discovered cycling as an unchanged leisure activity – and as a way to get to work without the risk of infection.
Far from the stock exchange, the industry recently proved to be lucrative for large investors. The American private equity house TSG got out of the Koblenz-based sports bike manufacturer Canyon, which went to a group of investors led by the Belgian financial holding Groupe Bruxelles Lambert (GBL). In financial circles, the overall valuation was put at around 800 million euros.
In the form of H-Gears, there is no wheel manufacturer on the market, but a component supplier: According to the company, its products were included in around two million of a total of 4.6 million e-bikes sold in Europe last year. Anyone who wants a purely eco-friendly investment is not the right choice with paper, because the portfolio also includes other products, including components for cars.
However, H-Gears wants to expand its business with electromobility, especially with e-bikes. “Our market position is particularly strong in the area of e-bikes,” said CEO Pierluca Sartorello in a statement on Wednesday. According to the company, the “clear strategic focus” is on the “E-Mobility” business area with gears, drive shafts and other parts. Its sales should grow disproportionately “in the medium term”: by more than three times, while the group sales should double. In 2020, electromobility accounted for 36 percent of group sales of 126 million euros, making it the largest of the three roughly equal divisions. According to official information, the “significantly larger” share within the division is in the bicycle business. It dominates so much that almost a third of the group’s sales are said to come from the cycling industry.
The other two business areas are e-tools and non-electric parts for cars, motorcycles and industrial applications. Customers include Bosch, Schaeffler, Stihl and Hilti. Mathias Seidler, who was already active for Finatem as CEO of Derby Cycle, is a member of the Supervisory Board. Ten years ago, Seidler recognized the enormous sales potential of electric bicycles more clearly than others. At that time he also knew how to win over investors and other interested parties with a pronounced charm – but he can also show an uncomfortably sharp side when things don’t go according to his wishes.
When the company goes public, on the one hand new shares from a capital increase with a volume of around 65 million euros are to come onto the market. On the other hand, the current owners are placing shares – how much is unclear. But the proceeds from the issue should be in the three-digit million range. The Frankfurt stock market can look forward to some initial public offering plans. Setbacks are inevitable: the Synlab laboratory chain has just set its issue price at 18 euros per share, at the lower end of the range of 18 to 23 euros. In addition, fewer shares come onto the market than planned.