An investment firm "set up by two grandsons of the founder of Walmart" acquired a majority stake in cycling clothing company Rapha in an estimated £200M ($259.7M) deal, according to Dominic Walsh of the LONDON TIMES. RZC Investments, formed by Steuart and Tom Walton, is understood to have "seen off competition from rival bidders including Investindustrial and Invus Group to seal the deal with the cycling apparel maker." Simon Mottram, who founded Rapha in '04, said that U.S.-based RZC was "buying out Active Partners, an early backer of the company, as well as the family, friends and small angel investors who had funded the business." He said that he and his management team were "also taking money off the table," although they were "rolling over an unspecified proportion of their investments alongside RZC" (LONDON TIMES, 8/8). In London, Mark Vandevelde reported Mottram, who has "built a cult following for the label since he revived the brand," will remain as CEO. Rapha has become an int'l "phenomenon, sending its bib shorts and classic gilets to more than 100 countries" (FINANCIAL TIMES, 8/7).
MOTTRAM REACTS: Also in London, Rupert Neate reported the sale values Mottram's stake in the business at £25M ($32.5M), although the company said that he would retain a "significant part" of his shareholding. Mottram said, "This is an exciting day for Rapha. The arrival of RZC Investments as a shareholder means we can pursue our mission to elevate cycling as a global sport and recruit more participants by engaging them and enabling them to ride with us at all levels." Mottram added that the cash injection from RZC would be spent on its "global expansion," with plans for 100 stores or "clubhouses" around the world. The company recorded sales of £63M last year, a 30% increase on the previous year, "as it tapped demand for its high-end gear" (GUARDIAN, 8/7). The BBC reported despite the firm's "current success," Mottram "faced difficulties when he was first trying to secure funding to start the business" in '01. Mottram said that he was "seen as a risky investment at the time because it was a number of years before the current boom in the popularity of cycling began." Mottram: "No bank would touch me. Who was really interested in cycling back in 2001 and 2002? It was just something us weirdos did" (BBC, 8/7). SKY SPORTS reported Rapha has "more than 200,000 active customers and 450 employees." Road cycling is now estimated to be a $47B-a-year global market, "making it the largest sports category in the world" (SKY SPORTS, 8/8).
