You don't need to be an 'investor' to invest in Singletrack: 6 days left: 95% of target - Find out more
Reported just now on Enduro Magazine.
How that will change, if at all, those back orders supposedly being fulfilled, and the DH team, remains to be seen. Can be good news. PinkBike reporting that Vali Hol moving on anyway.
Rotten news for employees.
I guess Enduro mag will have strong sources (being a German outlet).
And I presume the brand & assets might be sold on in the near future, as part of the process?
That's shit. Hopefully YT US will continue (they're a separate entity) and be able to support existing owners with parts etc.
Oisín rode the last race in a TLD jersey, instead of a YT Mob one. The signs are not good for the team, hope he picks up a factory ride for next year.r
I mean can’t be good news, not can.
Its ok. It's being bought back. By the owner.
Step 1. Start company and buy hype using debt.
Step 2. Sell hyped-up overvalued company to investors.
Step 3. Wait for investors to collapse under weight of debt leaving customers and suppliers in the lurch
Step 4. Use some of the money investors gave you to buy back the company debt free (soz suppliers and customers, lol!!)
Step 5. Repeat
Infinite money glitch.
Reported just now on Enduro Magazine.
How that will change, if at all, those back orders supposedly being fulfilled.
from pinkbike
”Every customer order will either be fulfilled (if the bike is in stock) or refunded. To ensure this, I have personally invested a significant amount of private funds. Outstanding orders should be completed within the next 4–6 weeks.”
that’s something.
@BruceWee you got Steps 2 & 3 wrong.
It should be:
Step 2 - Sell to Private Equity company for an absolute truckload of money
Step 3 - Wait 5 years (and it’s always about 5 years with PE companies) until PE wring every single penny out of the company and/or pump it full of debt to maximise shareholder profit at the expense of the company, customers and staff.
And then buy it back for pennies on the pound and try to rebuild your company. See Kona as a recent example.
it’s always the same with PE and it’s nearly always about a 5 year cycle (just over 4 this time I believe).
Oisín rode the last race in a TLD jersey, instead of a YT Mob one. The signs are not good for the team, hope he picks up a factory ride for next year.r
Kolb and Moir are still riding around in YT gear.
US subsidiary not affected according to the pink bike article.
TBH the owner sounds like a prize knob & some of the imagery is fairly questionable - so as ever feel for the people who have lost their jobs.
But his comment about the horror of putting his own money in grates somewhat, you're a business owner that's what happens you reap the rewards when you have much profit, so why shouldn't you have to shell out when you **** up.
@BruceWee you got Steps 2 & 3 wrong.
It should be:Step 2 - Sell to Private Equity company for an absolute truckload of money
Step 3 - Wait 5 years (and it’s always about 5 years with PE companies) until PE wring every single penny out of the company and/or pump it full of debt to maximise shareholder profit at the expense of the company, customers and staff.
And then buy it back for pennies on the pound and try to rebuild your company. See Kona as a recent example.
it’s always the same with PE and it’s nearly always about a 5 year cycle (just over 4 this time I believe).
You missed the steps where the employees and creditors get shafted to enable the cheap buy back. Having just been through a pe backed company liquidation it’s horrible for the staff who get very little to help whilst having to find new jobs.
Posted before ready
Sorry, mispost!
When PE buys a significant ownership stake in a business most of the ultimate value for the PE buyer is in the exit event. Making an investment in the expectation of getting peanuts for it at year 3-5 fundamentally makes no sense to organisations that exist to drive growth in capital values.
A few years ago the bike industry was riding a high and various PE deals were done.
In the last 2-3 years the bike industry has had a long run of supply and other issues, many of which are similarly afflicting other industries especially those with reliance on disposable income and discretionary spend from cost of living, production issues, geo-political changes. The result has been some failures.
It's not like YT has been alone in this. One example of press on this and the problems in 2024 and before.
https://www.cyclingweekly.com/news/the-bike-industry-survived-to-2025-what-happens-now
Voluntary administration to "restructure".
Yeah it seems more like the PE investor has taken a bath on this, with the COVID boom and bust probably responsible for that.
So how come the original owner gets first shout at buying the company back for peanuts? Clause in the sale contract?
Wonder if the staff might have preferred an alternative buyer?
Yeah it seems more like the PE investor has taken a bath on this, with the COVID boom and bust probably responsible for that.
So how come the original owner gets first shout at buying the company back for peanuts? Clause in the sale contract?
Wonder if the staff might have preferred an alternative buyer?
The staff wont get any say in the matter. Im sure the PE house has taken a bath on this one, but I cant muster up any sympathy for the billionaire who owned the PE house. The PE could have put up more cash to keep the business going in the hope of turning it round. Clearly in this case they decided that taking the hit was the best way out for them
Yeah it seems more like the PE investor has taken a bath on this, with the COVID boom and bust probably responsible for that.
So how come the original owner gets first shout at buying the company back for peanuts? Clause in the sale contract?
It probably helps the original owner is also the current CEO and has been since February 2024, and from his comments it seems like he is the one vetting the offers and presenting them to the creditor committee.
If he genuinely wants to rebuild the company then someone will definitely be taking a bath on this. My guess would be the suppliers since keeping customers sweet would have to be a pretty high priority. I'd imagine PE Investors know how to structure deals so that the money they lose was somehow never really there in the first place.
Whenever these stories get reported I'm always left with the impression the mtb press know more than they are letting on. I can't help but feel we get the parts of the story the subject of the story want us to but with key details left out.
Could just be me and my suspicious cynical mind, of course.
So how come the original owner gets first shout at buying the company back for peanuts? Clause in the sale contract?
They don't. There are reasons that previous / existing management are fairly regularly the most viable and highest bidding buyer in an insolvent or distressed sale.
- They know (or think they know) everything about the business so they'll often be prepared to do any one or more of pay more, do less due diligence and compromise/not fight on key contractual terms.
- Often they're emotionally invested in the business, the staff, the name above the door etc.
- It may be the only thing they know and so they're desperate to hang on to something and that adds motivation to do the best deal.
On the 'first dibs' point no sophisticated buyer will have tied their arm up behind their back as to who will buy it if it fails.
Such a term even if it existed would probably not be legally enforceable anyway.
I'd expect the committee has had a decent understanding of the offers (certainly if it's even remotely like a UK one). It's likely there'll be at least a couple of professional advisers sitting on it or alongside committee members.
You've got to wonder though.
He's been CEO for a year and a half and the company still went under. What has changed or what is he going to do differently to make it profitable? And if there is a route to profitability why didn't he do it in the last 18 months?
Or is it simply the case that the company wasn't profitable with the amount of debt it had taken on and now that the debt has been wiped away it can now be profitable?
If the only people losing out are PE investors then fair enough. But I doubt that's going to be the case.
If the only people losing out are PE investors then fair enough. But I doubt that's going to be the case.
I think there were a lot of people who got caught out in the recent firesale.
There's not been absolute clarity, but CEO matey boy has suggested that he's put his hand in his pocket to cover customer orders. Possibly only after the internet outrage though.
I seem to recall it was uncovered that YT owed some very large amounts to manufacturers, so that's probably what'll get written off to allow him to get his snout back in the trough?
Thanks garage-dweller - that does make sense. I'd have thought there would be other potential buyers post-administration, but maybe everyone's too smart to invest in a bike brand in the current market 😀
I read somewhere that they’d managed to sort out the customers waiting for bikes who got stiffed. No idea if correct or not though.
I seem to recall it was uncovered that YT owed some very large amounts to manufacturers, so that's probably what'll get written off to allow him to get his snout back in the trough.
That's what I'm thinking. Hopefully these manufacturers are big enough to absorb the cost. However, I'd imagine it will have knock on effects.
I’m guessing PE owners stopped paying stopped funding YT in June and that meant they couldn’t pay their suppliers.
Kolb and Moir are still riding around in YT gear.
Some members of the team have been treated worse than others.