Harley Davidson parts supplier Global Motorsports, which fought off a $90 million hostile takeover bid from rival (and minority investor) Golden Cycle, in late May agreed in principal to be acquired by Fremont Partners, a San Francisco-based investment group, for $115 million or $23 a share in cash.
Morgan Hill, CA-based Global Motorsports, parent of the Custom Chrome and Chrome Specialties catalogs, had been fighting what it has termed an “inadequate offer” proffered in April by Wynnewood, PA-based Golden Cycle, a private firm run by former Rite Aid Corp. founder Alex Grass and his son Roger. Golden Cycle had offered $18 per share for the 89.6% stake of $122.7 million Global Motorsports that it does not already own.
But the $605 million investment conglomerate Fremont Partners offered $5 more per share than Golden Cycle. “Fremont Partners came in and viewed the facilities and ultimately came back with a significantly better offer,” says Joseph F. Keenan, chairman of Global Motorsports.
The Fremont Partners letter of intent stipulates that a cash payment of $5 million be paid to Fremont Partners if the deal does not close and Global Motorsports enters into another agreement at a higher price. The letter of intent also states that Global will not seek or negotiate with other potential suitors until June 27.
Keenan says there will be no change of management after the transaction and says now that the deal has been agreed to, the company will concentrate on its aftermarket motorcycle parts business. “Maybe we will explore other acquisitions,” he says. “But nothing in the foreseeable future.”