CFI advised Wheelies and Tredz on its sale to Halfords

Cardiff –  CFI United Kingdom acted as the exclusive financial advisor to Wheelies and Tredz on its sale to Halfords.

Wheelies and Tredz are established by founders Keith and Michael Jones as a single bike shop in Swansea in the 1980s, Tredz and Wheelies now employ around 250 people. Tredz is an online retailer of premium bikes and cycling parts, accessories and clothing. Wheelies is the UK’s largest provider of bicycle replacement for insurance companies. Collectively the two businesses generated revenue of around £32m for the year ended 29 February 2016, reflecting growth of 36% over the prior year, and EBITDA of £2.3m. Wheelies is now the UK’s largest provider of bike replacement on behalf of insurance companies and operates a highly experienced claims handling team, supported by a comprehensive bicycle validation system. Tredz was launched as a separate e-commerce operation in 2005, with its own bricks and mortar presence added in Cardiff and Swansea two years later. The majority of sales are online; fulfilled from a separate warehouse operation where a team of highly skilled and experienced bike technicians build bikes, which are then carefully boxed and delivered direct to customers’ homes.

Halfords is a FTSE 100 company that specialises in the retailing of bicycles and automotive parts and accessories.

CFI acted as lead advisor to the shareholders of Wheelies & Tredz in its sale to Halfords. The initial cash consideration is £18.4m and has been settled from the Halfords Group’s existing borrowing facilities. Dependent upon the financial performance of Tredz in the year ending 28 February 2017, there will be an element of deferred consideration payable in 12 months.The total purchase price is expected to equate to an EBITDA multiple of around 7 times and the acquisition will be earnings enhancing from the first year of ownership.

Keith Jones, group managing director of Tredz and Wheelies, said: “We are very proud of the businesses that we’ve grown from a small shop twenty seven years ago into a strong operator in the premium cycling market, with a team of over 250 people. However, the time has come for us to work with a partner on the next phase of growth. Halfords is exactly what we were looking for. With the support and resources of a large group, we look forward to building upon what we have achieved so far to drive long- term growth. We are very grateful to our lead advisors Gambit Corporate Finance, who have worked with us on a strategic value maximisation initiative over a three year period. Frank Holmes, Partner, has sat alongside the board as a quasi Non-Executive Director for the past three years, providing regular strategic and commercial advice on a wide variety of external and internal matters. Ably assisted by Simon Marsden, Director, their input has helped us identify and source a market leading partner in the sector, Halfords, which will enable the businesses to flourish in the years to come.”

The transaction closed on 23 May 2016.