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PostPosted: Mon Aug 07, 2017 9:45 pm 
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http://www.velonews.com/2017/08/news/walmart-heirs-buy-rapha_445542

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PostPosted: Mon Aug 07, 2017 11:15 pm 
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Calnago wrote:


Sweet. Cant wait to see the Walmart smiley face on future Rapha jerseys.


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Posted: Mon Aug 07, 2017 11:15 pm 


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PostPosted: Mon Aug 07, 2017 11:26 pm 
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Walmart didn't purchase Rapha, it was the heirs of Walmart (Stuart and Tom Walton) private investment firm, RZC Investments, that bought Rapha.

The bigger mind boggling aspect of the story is that Rapha sold for $260.5 million.

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PostPosted: Mon Aug 07, 2017 11:29 pm 
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Well, I hope the customer service and clothing quality stays intact.
Better them than LVMH I guess? Prices might have skyrocketed under them...


Is 260m that mind boggling? They reported 63m gbp revenue last fy. Not sure what their profit was though.


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PostPosted: Mon Aug 07, 2017 11:44 pm 
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When Cannondale was bought by Dorel several years back, it was for around $200 million. I believe before the sale in 2008, Cannondale was doing around $200 million in 2007.


So yes, 260 million for Rapha is mind boggling for me.

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PostPosted: Mon Aug 07, 2017 11:49 pm 
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After some more digging, in 2016 Rapha only made a profit of £1.1 million ($1.4 million) on £48.8 million ($62.1 million) revenues in 2016. They were just acquired for $260 million on just $1.4 million in profit. Talk about a bubble and more money than sense.

http://leanluxe.com/tracking-the-rapha- ... -gathered/

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PostPosted: Mon Aug 07, 2017 11:53 pm 
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53x12 wrote:
Walmart didn't purchase Rapha, it was the heirs of Walmart (Stuart and Tom Walton) private investment firm, RZC Investments, that bought Rapha.

The bigger mind boggling aspect of the story is that Rapha sold for $260.5 million.


Rapha is worth about the same as Neymar.


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PostPosted: Tue Aug 08, 2017 12:52 am 
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53x12 wrote:
Walmart didn't purchase Rapha, it was the heirs of Walmart (Stuart and Tom Walton) private investment firm, RZC Investments, that bought Rapha.

Yes, of course... but the headline just wouldn't have the same appeal if it read "RZC Investments buys Rapha".
And the $260M is really just for likely a little over half of it. Enough to give them a majority stake, which technically doesn't even have to be half depending on the share distribution. But that's all boring stuff. Just follow the flashing light to Aisle 9!! Gotta hand it those Rapha boys. Great success story in a very short time. Marketing done right.

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PostPosted: Tue Aug 08, 2017 1:02 am 
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That's a sh*tload of money for Rapha. They're a good marketing company, but do they have any IP? (I'm a fan and like the Proteam line, and as a marketer appreciate the solid brand building they've done. They are a marketing company, after all. Assos is a product company. Castelli is both.)

Assuming they had an EBITDA of $2.5M (pounds to dollars), at a purchase price multiple of 5x, the company should have sold for $12-13M.

The buyers are by all accounts good dudes. They also clearly know a lot more about M&A than I do. Or they're crazy.


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PostPosted: Tue Aug 08, 2017 2:52 am 
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Calnago wrote:
53x12 wrote:
Walmart didn't purchase Rapha, it was the heirs of Walmart (Stuart and Tom Walton) private investment firm, RZC Investments, that bought Rapha.

Yes, of course... but the headline just wouldn't have the same appeal if it read "RZC Investments buys Rapha".
And the $260M is really just for likely a little over half of it. Enough to give them a majority stake, which technically doesn't even have to be half depending on the share distribution. But that's all boring stuff. Just follow the flashing light to Aisle 9!! Gotta hand it those Rapha boys. Great success story in a very short time. Marketing done right.


$260 million is likely half? Who in their right mind would value Rapha at 1/2 billion? Not only is cycling a very small segment of the sporting world, but the segment that Rapha caters to is an even smaller segment. Someone would need to be drunk to give Rapha that valuation.


GonaSovereign wrote:
That's a sh*tload of money for Rapha. They're a good marketing company, but do they have any IP? (I'm a fan and like the Proteam line, and as a marketer appreciate the solid brand building they've done. They are a marketing company, after all. Assos is a product company. Castelli is both.)

Assuming they had an EBITDA of $2.5M (pounds to dollars), at a purchase price multiple of 5x, the company should have sold for $12-13M.

The buyers are by all accounts good dudes. They also clearly know a lot more about M&A than I do. Or they're crazy.


Spot on regarding Rapha being a great marketing company. Their success lies in telling a story, a lifestyle and portraying that through their product line and photoshoots. They have done bang-up job with that.

I'd agree with your rouge estimate for what Rapha should have sold for. Maybe slightly higher if the acquiring firm believes there is room for growth. I'm still speechless for what RZC Investments decided to pay.

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PostPosted: Tue Aug 08, 2017 2:56 am 
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Apparently, RZC also owns a piece of Allied Cycle Works, the Arkansas based frame maker who bought Guru's tooling/machines when they went out of business.

Maybe soon we can buy a custom carbon frame and Rapha clothing at Walmart?

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PostPosted: Tue Aug 08, 2017 3:06 am 
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$260 million for Rapha?

Image


Simon Mottram be like:

Image


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PostPosted: Tue Aug 08, 2017 3:49 am 
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More reason to buy/invest in Q36.5 gear


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PostPosted: Tue Aug 08, 2017 6:01 am 
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I could see Rapha Golf and Rapha Tennis next.

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Posted: Tue Aug 08, 2017 6:01 am 


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PostPosted: Tue Aug 08, 2017 8:02 am 
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AJS914 wrote:
I could see Rapha Golf and Rapha Tennis next.


How so?

SImon Mottram is retaining his interest, the buyers are well known supporters of mountain biking in the US.

If you read the background of why Rapha is raising capital you would see it's all cycling related.


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