On Wednesday BikeBiz revealed that Wiggle was negotiating to buy Chain Reaction Cycles – the deal has now been signed. The two companies together are worth more than £300m. (Halfords has sales of £940m a year, across motoring and cycling – the cycling part of the business has sales of about £300m. While Wiggle and Chain Reaction are mainly online retailers, Halfords has 400+ stores, and 12,000 employees. A Halfords company report said it is "the nation’s leading cycle retailer.")
The deal is subject to merger control clearance from the Competition and Markets Authority.
Chain Reaction Cycles managing director Chris Watson said: "This is an exciting new chapter for the Chain Reaction Cycles brand. Since the business started in 1984, we’ve grown strongly from our mountain bike origins in Northern Ireland to meet the needs of more MTB, BMX and road cyclists across more countries."
He added: "Coming together with Wiggle is a great way to continue that growth, as a global force in cycling and a leader in technology, ecommerce and, of course, innovation.”
Wiggle CEO Stefan Barden, who will lead the combined company, said: "In the global online retailing marketplace in which we operate, there is a compelling industrial logic for our two businesses to come together to become a stronger force.
He added: "We have long respected Chain Reaction Cycles as a business and share its values and commitment to delivering the best possible price and first class service for its customers. Like us they have a deep seated love of cycling."
Wiggle was founded in 1999 as an offshoot from Butlers Cycles, a Portsmouth bike shop and was sold to Bridgepoint Capital for £180m in 2011.
Chain Reaction Cycles sprang from a small bike shop in the tiny town of Ballyclare in 1989. The shop is now a barber’s shop, a very small barber’s shop. This was the second shop. The first, started in 1984, was Ballynure Cycles, an even smaller operation. The business was founded by George and Janice Watson – their first sale was a chain link costing 11p. When the business moved to Ballyclare the decision was made to change the firm’s name, and Chain Reaction Cycles was born. The website was launched the following year.
A third of CRC’s sales come from outside the EU, as dealers in Australia and America know only too well. In 2014, the company – which employs more than 600 people – reported profits of £3.77m from sales of £153.4m.
Bridgepoint reports that Wiggle employs 444 people, and had sales of £182m in 2014, with half of those sales delivered internationally.
Wiggle and Chain Reaction had been fighting head to head for many years, with Wiggle moving ahead of Chain Reaction in 2013 when sales at the family-owned firm dropped six percent to £145m.