MiddleGround Acquires Bicycle Parts Distributor

MiddleGround Acquires Bicycle Parts Distributor

Middleground’s newest platform operates in the growing bicycle parts and accessories distribution sector and serves a broad and fragmented customer base.

HLC products include handlebars, seats, pedals, wheels, apparel, bells, horns, helmets, lights, air pumps, and locks sold under more than 170 brands

SOURCE: Getty Images

MiddleGround Capital has acquired HLC, a distributor of bicycle parts and accessories.

HLC products include handlebars, seats, pedals, wheels, apparel, bells, horns, helmets, lights, air pumps, and locks sold under more than 170 brands including SRAM, Shimano and Garmin, as well as house-owned brands including Evo, Megasoft and Wheel Shop. HLC has just over 70 sales representatives and 4 regional distribution centers that service more than 5,500 North American retailers with one and two-day delivery.

[Source: HLC]
HLC’s history traces back to 1945 when Charles Lambert opened a Canadian retail bicycle shop under the name Cycles Lambert. In 2006, Roynat Capital (part of Scotiabank) acquired a majority interest in the company and in 2008, the Barrett Corporation purchased a controlling interest in Cycles Lambert with Roynat remaining as a minority shareholder (Roynat fully exited its investment in 2013). In 2010, Cycles Lambert acquired The Hawley Company, a South Carolina-based bicycle parts distributor, and began operating as Hawley-Lambert Cycles. Ten years later in 2018, the business rebranded as HLC.

Today, HLC maintains headquarters near Quebec City in Levis, Quebec, and in Lexington, South Carolina. Post-closing, HLC’s President, Pat McGinnis, will continue to oversee the day-to-day operations of the company.

“Today marks a very positive development for HLC and we are eager to begin working with the MiddleGround team as we amplify our growth efforts,” said Mr. McGinnis. “MiddleGround brings a distinct style with distinguished operational expertise, and we knew this would be a strong fit from the start. We are looking forward to working together to better serve the needs of bike stores and retailers through an expansion of geographic reach, product portfolio and end market exposure.”

“We’re thrilled to invest in and support the growth of a clear North American market leader within the bicycle parts and accessories distribution industry, which has proven to be a promising space given recent tailwinds,” said John Stewart, a founding partner of MiddleGround. “As the mobility industry develops, bicycles will play an important role in the transformation of the industry. HLC is uniquely positioned serving a broad and fragmented customer base with value-added distribution capabilities.”

“With the ongoing increase in bicycle ridership, which accelerated due to technological advances in the industry and the re-introduction of cycling to the masses during COVID, HLC is in a great position for long-term growth,” added Mr. Stewart. “We are excited to partner with Pat and the team to expand HLC’s geographic footprint and make investments in technology and infrastructure that allow HLC to both better serve existing customers, as well as attract new customers. For MiddleGround, this is the beginning of our investment in a platform that we believe can grow exponentially with the right strategic partner.”

MiddleGround makes control equity investments from $25 million to $65 million in North American-based business-to-business companies in the industrial and specialty distribution sectors that have enterprise values of up to $200 million. Lexington, Kentucky-based MiddleGround has over $2 billion of assets under management and was formed in May 2018 by former Monomoy Capital professionals John Stewart, Lauren Mulholland and Scot Duncan.

Lazard was the financial advisor to HLC on this transaction.

© 2022 Private Equity Professional | September 23, 2022

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