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Discussion in 'Downhill & Freeride' started by c2001, Jan 7, 2008.
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umm...so what does this mean?
It means they have a new owner
Dam that compnay is like strictly Corporate America dude. Hopefully guys at Fox won't be working in shirt/ties.
Wow, Compass Diversified Holdings owns a wide range of companies (hence the Diversified I guess).
Probably doesn't mean anything. From the impression I got from it, it's just for financial backing, which could lead to new products.
Is that them??
It's financial backing only, as a major share holder. Bob Fox remains CEO and a majority share holder.
fox can make its products in usa. THey are going to have to move to asia because their products are already the most expensiveon the market.
Shirts and ties might be a stretch. Maybe to start with, the people who answer the phone can limit the amount of pot they smoke during their shift.
Maybe the stanchion coating will last longer now ;-)
They acquired the company, that is a little more than just financial backing only.
Their products are the most expensive because they are (arguably) the best out there. There are rear shocks that are more expensive than Fox. Besides, its not like they are leaps and bounds more expensive than their competitors. If you want a high performance, premium product, you have to be willing to pay a premium price. End of story. I don't foresee Fox moving production overseas anytime soon, if ever. There are still companies and consumers who take pride in manufacturing/purchasing American made products.
Also, I don't think that Fox produces products in large enough quantities for them to have any significant benefit from overseas production. Not surprisingly, many consumers perceive quality based on origin of manufacturing (and are therefore more easily convinced to pay a premium price for something domestically produced).
Nope. They purchased "a majority interest". They did not acquire the company completely according to the Fox Press Release.
"Bob Fox will retain a significant ownership in FOX - an ownership now shared with senior managers"
i hope that the people on here know that fox doesn't make every of their forks in the USA i.e. the fork lowers.
IINM, generally when a holding company acquires another company (like Fox) its for one of 2 reasons... its to fund a significant expansion, or the company is not doing well financially and needs to get back on track (for any of a number of reasons).
Personally I hope its the first reason. Oh the rumors!
Here's the full release FOX sent out
The Compass Co. is using word "acquired" not me..
I agree they did not purchase it completely, but 51% or more (majority) means the own it, and for the most part control the co.
From the release it sounds like they acquired 76%.
Doesn't matter to me either way, but that is a lot of money..They valued the co, and $85M!
According to Fox's PR, they have been shopping for some backing for awhile and are quite stable financially. My guess is that it's time for an expansion.
You really believe the spin Fox's PR team is putting on it?
Compass is a public co. The truth will come out in the wash..The SEC filings will say it all.
If it is for expansion good for them..
Nor particularly, but I deal with them enough for a variety of things to know they aren't exactly in dire straits. The purse strings haven't been pulled tight.
Compass's website offers a different take:
As founder of Fox, and the sole owner for over 30 years, I am now very excited about this transition of ownership to Compass. The financial strength and resources Compass provides will enable Fox to continue its strong growth and leadership in all its markets. It will also enable us to aggressively pursue new projects and opportunities. I will continue as President and CEO and will maintain a significant financial interest. On a personal note, I am excited about the opportunity this provides me to focus more of my time and energy doing the design and engineering work, the part of the business I love the most. As a successful, healthy company, Fox had the luxury of looking for and selecting the best partner for this transaction, we chose Compass."
Bob Fox, President and CEO
Fox Racing Shox
A significant financial interest is clearly not a "majority stake." However, it does seem like Compass' experience with specialized tech manufacturing businesses could be very good for Fox in the long run.
According the public release it sounds like 76/24 with Compass owning majority..
IMO, this is a business move to strengthen Compass position as a public co. The have to acquire companies to grow, and they have stockholders to answer too, so if there wasn't an upside to this ($$$$) they wouldn't have done it.
According to Compass' own press release, they acquired 76%, with 24% remaining with bob Fox and his senior management.
edit: Beaten like a red headed stepchild
It only looks positive to me. An investment group with successful niche manufacturing companies, and large capital for Fox to take on the vertical integration of their competitors (Sram, Hayes group). The real question is, who will Fox acquire in their own quest for expansion and vertical integration? At the very least I'd expect them to develop suspension products that hit more of the market than their current high-end-only offerings.
...excellent question to ask!
i see it as a good thing, with the other companies in the group, they will make relationships with these and other companies, and will have access to new materials such as metals and plastics(lets hope it doesnt come to that) but they will be able to develop their product even further.
*expirimental metals and plastics, sorry
Don't forget that they make products outside of the bicycle industry. I would guess any expansion would take place in the powersport industry.
Unless its to expand into frames?
That would be kewl, FOX frame, shock, and fork combo, factory sorted!
Here is the PR sent out fomr Compass... http://codi.client.shareholder.com/releasedetail.cfm?ReleaseID=284895
I've italisized what I think is important as a summary.
It sounds like Bob is still gonna be in some amount of control. And it sounds like Compass isn't out to change the companies, and more improve. Of course this is all after the PR spin.
Fox obviously has their suspension products dialed in, and getting better all the time. That said, a huge influx of money can do any company good ... ask Rock Shox.
Plus, "Fox" the brand is a lot bigger than suspension. Compass probably looked at it as a safe investment with a good probability for returns.
edit: yea, what they said. I guess I should read the whole post before posting!
I agree. Consider at most you'll have at most $2500 of suspension on your bike, but a Trophy Truck could easily get be anywhere from $40-60k for a set full Fox setup.
Lots of reasons there for somebody wanting to buy FOX, but I'd say the guy Bob Fox, just wanted to release some equity in the business , either to go and spend and enjoy, put into a pension, or diversify invest in some other businesses....
He as an entrepreneur has done an amazing job... probably wnats to do something else
or just get back to being more involved with product like when he started?
Does Fox have OEM penetration in the motorsports markets like they do in the bike market? I'm not familiar with those markets, but it does seem like Fox puts a lot of Fox-branded shocks on mountain bikes from manufacturers around the world, while if I go into a Honda or Yamaha dealer to buy an ATV or moto, I'm not going to get Fox suspension on it OEM.
From what I've seen in the bike industry, and how many companies year-in, year-out spec Fox suspension across their product lines, they have to be doing at least $15-20 million a year in bike products. That's a decent percentage of their yearly $100 million in revenue.
and that's still worth more than any of us
does this mean they will create a 40 series singlegrown
You lost me on this one. They are over $100M in revenue a year, per Bob in the Fox press release.
Revenue and valuation aren't tied together. Your earnings calc is right though.