ABG = Litespeed + Merlin + QR + Tomac
For all practical purposes, Litespeed IS American Bicycle Group, LLC headquartered in Ooltewah, TN... even posted an ABG response and contact infomation in a previous post.
This story appeared in The Times & Free Press on Sunday, December 17, 2000
Litespeed races on with acquisitions
BY BOB GARY JR.
Staff Writer
Ooltewah-based bicycle maker Litespeed, the nation's leading manufacturer of titanium bike frames, continues to grow at light speed.
Just 18 months after its acquisition by billionaire Leon Hirsh, Litespeed has acquired two more companies, one of which was its principal American competitor, and should have another purchase wrapped up by the end of the year.
Cycling industry consultant Bill Fields said Litespeed, founded in 1986, already had a stranglehold on the U.S. titanium-frame market and will just get stronger.
"With this infusion of capital," Mr. Fields said, "Litespeed could grow by a factor of four over the next six to seven years."
Litespeed has acquired Merlin Metalworks of Cambridge, Mass., and California-based Quintana Roo, both for undisclosed sums. Merlin was a distant second to Litespeed in space-age tough titanium frames, with 20 percent of the market compared to the Ooltewah company's 60 percent. Quintana Roo is the nation's No. 1 manufacturer of equipment for triathletes, including bikes and wetsuits.
Mark Lynskey, Litespeed's president and chief executive officer, said the result has been 50-percent growth for Litespeed -- from sales of about $10 million last year to a projected $15 million this year. Mr. Lynskey said Litespeed has added 52 employees this year for a total of 132.
Mr. Lynskey said Merlin' entire operation and Quintana Roo's bike operation have been moved to Ooltewah. Manufacturing of other Quintana Roo equipment will stay in California, he added.
Randy Finnell, Litespeed's executive vice president, said the company will continue to keep the Merlin Metalworks and Quintana Roo brand names on the market. Mr. Fields, the industry analyst, said that is "quite a good move."
Mr. Finnell said the decision was based on emotion. "Bike people are very passionate about their bikes, like how NASCAR fans feel about Ford and Chevrolet.
"We knew there was no reason we couldn't build a Merlin bike, but would Merlin dealers accept Litespeed building a Merlin bike?"
Mr. Finnell said that situation has worked out well. Merlin's top design people have signed on at Litespeed, he said, and dealers "love" the new bikes.
Bill Dominici, co-owner of River City Bicycles in Chattanooga, said Merlin riders also appear to have accepted the situation.
"From what I've seen, I don't think there's an issue," he said. "You're not buying a Litespeed that has a Merlin decal. You're buying a Merlin, because all the design features that go into a Merlin to make it unique are still there."
Mr. Lynskey said Litespeed's plan is coming along nicely.
"The plan is to gather up brands and products representing the full scope of high-end cycling, build an organization and management team to support those multiple brands, maximize our market position in America, then take those multiple brands to Europe next year," he said.
"Between Litespeed and Merlin, we certainly have the high-end titanium bikes. We've got triathlon bikes through Quintana Roo.
"What we haven't acquired yet," Mr. Lynskey said, "is mid-to-high-end mountain bikes."
Mr. Finnell said Litespeed is "not even playing in the mountain-bike market," but should be by the end of the year.
"As we speak, we're certainly looking at a mountain-bike company that will round out our brands very nicely," he said. "It's a high-end aluminum mountain-bike company, well-known and owned by a world champion. That's all I can say, but the growth it would give our company would be unbelievable.
"After we do this one, we'll have our plates full for at least another month or two," Mr. Finnell said with a laugh.
It's all heady stuff for a company that began as a metal fabrication business started by Mark Lynskey's late father, Bill. Mark Lynskey said even after Litespeed struck gold with titanium bike frames, it was run very conservatively.
"We chose not to take some risks," he said. "We chose not to extend credit terms to dealers; you paid cash to sell Litespeed. We chose to have all telemarketing done from here, and not have an outside sales force.
"We were fully cognizant that we were not capturing the full potential of the brand, but what the new owner has done is maximize our potential. We have a full credit program, managed by a staff, and we've created an outside sales force of full-time employees.
"It's become much more than I'd ever envisioned," Mr. Lynskey said.