Industry

Manufacturing | Bicycles

DSI'S Role

Financial Advisor to Subordinated Debt Holders

Services Provided

  • Business Plan Analysis

CANNONDALE BICYCLE CORPORATION

Case Highlights

  • Evaluated reasonableness of management projections and providing recommendations regarding company’s cost structure and pricing policies
  • Assisted in negotiations for the purchase of company assets

Case Narrative

DSI was engaged as financial advisor to Pegasus Partners to provide due diligence and business plan analysis in connection with its interests (senior notes and warrants) in Cannondale Corporation.  Pegasus Partners was Cannondale’s largest secured creditor.  Cannondale manufactures and distributes bicycles, ATVs (All-Terrain-Vehicles), motorcycles, and bicycling and motorsports accessories and equipment.  Specifically, DSI assessed the reasonableness of management’s revenue projections given market constraints and production constraints caused by inventory imbalances, raw material sourcing and inadequate liquidity.  During the pendency of the engagement, Cannondale filed Chapter 11 bankruptcy and DSI’s role evolved to providing tactical and strategic advice in connection with Pegasus Partners’ purchase of the company.