Hero Cycles acquires Firefox Bikes!
Firefox Bikes, the market leader in premium cycle segment, to retain its brand identity and remain separate entity post acquisition. Hero Cycles to make heavy investments in Product Innovation and Customer Experience at Firefox. The acquisition will also see transfer of technology and industry expertise from Hero Cycles to help Firefox increase and upgrade its product range Firefox. Shiv Inder Singh, founder and managing director of Firefox Bikes, will continue to lead Firefox post the acquisition as the Chief Executive Officer.
Hero Cycles, world’s largest bicycle manufacturer by volume, today announced its acquisition of Firefox Bikes, India’s largest premium bicycle brand, as part of its strategy to further cement its position in the fast-growing premium cycling segment in India. As part of the deal, both companies have mutually agreed that Firefox Bikes will continue to have its distinct brand identity and remain a separate business entity post the acquisition.
The promoters have divested their entire equity stake in Firefox Bikes Private Limited in an all-cash transaction to Hero Cycles. The deal includes Firefox brand of cycles, accessories and spares along with exclusive distribution rights of ‘Trek’ and other global brands.
The acquisition will not just aim at consolidating Hero’s fledging market share, but is also aimed at expanding the horizons for Firefox Bikes. The acquisition will see transfer of key technology, and rich global experience garnered by Hero Cycles over the last 60 years to Firefox Bikes which is often credited for creating the premium range in the Indian cycling market. Firefox, which has an established presence pan-India through a network of 160 outlets, has been growing at a 3-year CAGR of 35% in revenue.
The financial transaction from Hero Cycles was led by company’s Chief Finance Officer Rohit Maheshwari. BAdvisors and BLegal acted as the transaction partners and legal advisors respectively for Hero Cycles for this deal. While, consulting firm Deloitte represented Firefox Bikes as their transaction partners.
Speaking about the acquisition Pankaj Munjal, Chairman and MD, Hero Cycles said, “This acquisition is one of the most significant developments in the history of Hero Cycles. We are extremely proud to have Firefox Bikes, which is one of the most recognised brands in the premium cycle segment, as part of the Hero Cycles family. It is a delightful moment for us looking at the immense possibilities that lie in front of both these brands which have distinct branding identities. We are confident that our customers and even dealers would appreciate the infusion of Hero’s hard-earned trust, credibility and world-class manufacturing prowess into a young and vibrant brand such as Firefox.”
“Post the acquisition, Firefox will continue to remain a young and dynamic brand with an international appeal. We at Hero Cycles have invested in Firefox only to help it realise its true potential and further its growth potential in the market. Through this acquisition, Hero Cycles will further expand its presence in all major categories of bicycles in India through its various brands such as Hero Cycles, UT, Firefox and UT Edge. The aim is to provide our customers with world-class products at every price range as per their fast evolving tastes and requirements” added Munjal.
The premium cycle segment in India, which started with humble origins in early 2000s, has been growing at 25% CAGR over the past many years in India. This segment has today emerged as one of the fastest growing segments in the market by clocking more than 2 lakh units a year. Among the factors which helped the segment register rapid growth was the evolving customer preference, especially in urban areas, shifting to fitness, recreation and lifestyle segments. Growing awareness for fitness and recreational activities in urban cities over the past few years also helped the premium cycle segment to grow aggressively in India. Firefox was among the first player in India to enter this segment and created a niche for itself with an enviable product range which attracted interests from customers across India and saw it clinching more than 40 per cent of this segment.
Speaking on Firefox’s journey through the last decade, Shiv Inder Singh, founder and managing director at Firefox Bikes, said, “We at Firefox were fortunate to have entered the cycling market at a time when Indian consumer had just started to expect more from their cycles. It was enriching and an exciting role to play where we not just created the premium cycle segment in India, but also introduced the next generation of performance and recreational cycles to the Indian consumer. We are very happy today that our effort into creating this segment has been recognised by market leader Hero Cycles and have now decided to take our young and an extremely vibrant brand to the next level.”
“This acquisition will help Firefox to penetrate further into the Indian market. This deal will also help Firefox to expand its marketing visibility and acquire an aggressive approach in reaching out to our prospective customers. Hero has committed in investing in expanding and upgrading our product range which will hit the markets soon. The acquisition will also translate into uplifting the customer experience at our stores through training of our existing distributor network by Hero Cycles” added Singh.
As part of the deal, Shiv Inder Singh will continue to lead Firefox Bikes post the acquisition as the Chief Executive Officer.
Currently, Firefox sells over 70 different models of Firefox bikes and 25 Trek models through a network of 160 company-owned and franchise outlets. Firefox also has tie-ups with international brands, such as Tern, Shimano, Saris, Finish Line, Kryptonite, Super-B and Slime.
The investments by the Ludhiana-based cycling giant, which produced 6 million cycles last year, will also help Firefox further increase its dominance in the premium cycle market through expansion of product portfolio, creating better customer reach through greater market visibility and exposure and introducing it to the latest global innovations being pioneered by Hero.
“In a bid to develop the true potential of Firefox in this niche segment, Hero Cycles has decided to invest heavily into product innovation by bringing in the best of world cycle technology to existing and future line of products in the premium segment. The endeavour will be to update and introduce new products in the market in tune with the evolving and maturing customer preferences. We are confident that the combined resources of Hero Cycles and Firefox have the potential to be the game changer in this segment” said Aditya Munjal, Director, Hero Cycles.
Hero Cycles will also be paying special interest in uplifting the customer experience at every Firefox store. Hero Cycles will also be expanding the number of Firefox stores in India at a rate of 25 per cent from the existing 160 stores.
Hero Cycles also announced its decision to setup a ‘Hero Innovation Centre’ in India aiming to build world’s most hi-tech R&D centre for engineering, innovation and designing of next generation of world-class cycles for India and for international markets. This innovation will cater to technology and designing requirements of both Hero Cycles and Firefox Bikes. The centre will further help in reducing Hero Cycles’ dependence on import of technology and design elements for its products without compromising on the quality of its product offering to its customers.