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More details emerge of rumoured LVMH Pinarello deal

Private equity firm part-owned by luxury goods giant said to be frontrunner to buy majority stake in Italian bike brand

The rumoured frontrunner to buy Italian bike brand Pinarello is not Louis Vuitton owner LVMH, contrary to reports earlier this week, but rather a private equity firm based in the United States that earlier this year entered a partnership with the luxury goods giant.

It may be a subtle distinction, but it’s an important one that perhaps provides a stronger rationale for a deal that, if initial reports were to be believed, would have seen the Italian bike manufacturer sit alongside the likes of Louis Vuitton, Bulgari and Veuve Clicquot in the LVMH brand line-up.

> Louis Vuitton owner LVMH reportedly set to buy Pinarello

According to a Bloomberg report citing “people familiar with the matter” – American journalese for insiders who do not want to go on the record – Greenwich, Connecticut-based firm L Catterton is the favourite to acquire a stake in the Veneto-based bike brand, founded in 1952.

The private equity house was created earlier this year when LVMH, together with CEO Bernard Arnault’s family holding company, took a stake in Catterton.

The latter was established in 1989, is said to retain a 60 per cent holding in the venture, and has made investments in more than 150 mid-market companies around the world.

Those include yacht-builder Princess, activewear brand Sweaty Betty, and pet food manufacturer Lily’s Kitchen.

Current L Catterton investments within the sports industry include compression clothing maker 2XU, the Peloton at-home fitness bike, sports drinks and supplements manufacturer X2 Performance, and the 360fly action camera brand.

It’s not difficult to see Pinarello, which has a reported turnover of some €50 million, slotting in there. Moreover, LVMH’s tie-up with the private equity firm allows it to invest in growing businesses that might otherwise seem a strange fit with its stable of brands in five distinct sectors – fashion and leather goods, wines and spirits, perfumes and cosmetics, watches and jewellery, and selective retailing.

Yesterday, Pinarello issued a statement which managed to steer a fine line between neither confirming nor denying that a private equity deal which would raise funds for growth by selling part of the family’s shareholding might be on the table.

“With reference to press leaks, the Pinarello family confirms that they have been evaluating, since a few years, different assets reinforcement options with a strong industrial base, in order to further strengthen the Pinarello brand in the world,” the statement read.

It added: “The Pinarello family is not considering to exit the business and will continue to follow the company in its future growth, as it has always done and with the same passion.”

According to Bloomberg’s sources, the family is indeed looking to sell a majority stake and is “in talks with several private equity funds” – a normal part of the process where a corporate finance house acting for owners of a business is looking for buyers.

It adds, in line with previous reports, that Fausto Pinarello would remain as CEO, which strongly suggests the family would retain a stake, and would be consistent with their assertion they are not planning to “exit the business" – or not entirely, at least.

Pinarello bikes have been ridden to 12 Tour de France victories - the three most recent by Chris Froome - and 2012 Tour winner Sir Bradley Wiggins used a custom track bike from the Italian manufacturer when he set the UCI Hour Record at Lea Valley VeloPark last year.

Simon joined as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.

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