*Updated* PUBLIC NOTICE OF BANKRUPTCY SALE: Cycle Force Group

Introduction

Are you interested in buying a bicycle company with a potential growth opportunity in the hot e-bike market at a price totaling half of the book value of assets and with no liabilities for only $1.7 million?

And are you able to act fast and participate remotely in a virtual bankruptcy auction being held next Monday, December the 13th in Iowa?

If so, this is an opportunity that you should explore. This experienced family business has been forced to enter a speedy bankruptcy auction due to extenuating circumstances but retains multiple underlying value propositions as a going concern.

Messingschlager, a German B2B bicycle parts importer and distributor closely familiar with the situation has completed due diligence and submitted an initial stalking horse bid to purchase Cycle Force. However, they have had little competition to-date due to the speed of the process and the opportunity remains to submit a competing offer.

Executive Summary

Cycle Force Group LLC, a chapter 11 debtor (“Debtor” or “Company”), is an importer and distributor of bicycles, parts, and accessories with sales into multi-channels throughout North America. A 363 sale of substantially all Debtor’s assets will be held on December 13th.

The deadline for any party interested in bidding to make a preliminary bid has been extended to December 10th. A $1.5M stalking horse bid from Messingschlager GmbH & Co. KG has been accepted with an initial minimum overbid increment of $200,000 and any competing bid must therefore be at least $1.7 million. Linked here is a schedule outlining in full the submission requirements for a non-stalking-horse bid.

This public notice updates the prior public notice published on October 25th.

1. When? The Preliminary Bid Deadline has been extended to December 10th. Debtor expects to announce the resulting Baseline Bid on December 10th. The Auction Date remains December 13th.

2. What? All or substantially all of the assets of Cycle Force Group LLC (“Cycle Force”), as a going concern.

3. Where? The sale is taking place under Bankruptcy Code §363, Cycle Force’s chapter 11 case, pending in front of the Honorable Anita L. Shodeen, in U.S. Bankruptcy Court for the Southern District of Iowa, Case number 21-00571-als11. The auction will take place in a hybrid format that supports remote, virtual attendance by qualified bidders.

4. Who? All inquiries should be directed to the company’s investment banker, Ravinia Capital LLC. Linked here is additional information about Cycle Force. Linked here is a confidentiality agreement. You may sign and email the confidentiality agreement to Ravinia Capital to receive additional information, or you may contact Ravinia Capital to discuss the opportunity generally prior to agreeing to appropriate confidentiality obligations (contact information below).

5. Company Summary.

1. Cycle Force, based in Ames, Iowa, is an importer and distributor of bicycles, parts, and accessories with sales into multi-channels throughout North America of around $17 million, before being impacted by increased tariffs, COVID-19, and the global shipping crisis.
2. Cycle Force, through Ravinia Capital, is seeking bidders to purchase the assets and continue operations as a going concern. Bidders in this process will be able to obtain not only Cycle Force’s accounts receivable, inventory, and equipment (with projected book values as of EoY 2021 of $1,601,930, $734,648, and $274,611, respectively) but also its extensive network of existing relationships and many promising potential growth opportunities, all without having to assume any liabilities.
3. Cycle Force serves as a turnkey gateway to and foothold within the United States for international bicycle manufacturers, providing them access to assembly services, drop shipping, and distribution through online marketplaces, big box stores and independent bike dealers (“IBDs”).
4. CFG’s products range from exclusively licensed high-end bicycles to budget bikes to value-line budget bikes. Additionally, Cycle Force is growing its e-bike business and can serve as a launching pad for further penetration into this hot, investor-favored segment.
5. CFG strategically markets its premium brands to IBDs, while entry-level offerings are primarily sold through its eCommerce partner, Amazon, as well as its retail partners, Walmart, Target, and Kohl’s.
6. This sale provides buyers who are willing to act quickly and decisively with a unique opportunity to acquire a fully operational platform possessing strong, positive, brand-name recognition within a rapidly growing industry.

6. Sale Procedures. Linked here is a summary of the sale procedures; here is an executive summary of relevant dates:

1. Preliminary Bid Deadline: December 10, 2021
2. Qualified Bid Announcement Deadline: December 10, 2021
3. Auction: December 13, 2021
4. Bid Deposit: $5,000
5. Minimum Initial Overbid of Stalking Horse Offer: $1.7 million
6. Subsequent Minimum Bid Increment: $100,000

7. More Information. Contact Tom Goldblatt ([email protected] or 312.316.4641) or Michael Shanahan ([email protected] or 847.507.9775) of Ravinia Capital.