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Lehman Brothers invests in SRAM
The company also is setting up a $10 million bicycle advocacy fund.
Component giant SRAM has a new minority owner: Lehman Brothers Merchant Banking. The fund manager is making an undisclosed investment in SRAM, which will retain its senior management, the company announced Thursday.
SRAM, which markets products under the SRAM, RockShox, Avid, Truvativ, and Zipp brand names, expects 2008 revenues to approach $500 million.
“We have now achieved scale where we believe it is prudent to add an experienced institutional investor to our shareholder base," Stan Day, SRAM's chief executive.
In connection with the investment, the company is establishing the SRAM Cycling Advocacy Fund. The fund, initially capitalized with $10 million, will support advocacy in the U.S., Europe and Asia on policy issues affecting cycling infrastructure and the bicycle industry. These funds will be paid out approximately $2 million per year for five years.
SRAM will seek advice from advocacy associations like Bikes Belong and expects to have a grant request process in place by November.
“Bikes are a constructive transportation and recreational solution. Governments everywhere are recognizing their value to address traffic congestion, environmental concerns, health promotion and high gas costs. The fund will support grass roots advocacy efforts focused on improving cycling infrastructure,” Day said.
The transaction is expected to close in late September.
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