Wiggle was sold for £3 million after last-minute collapse of initial deal

In a report released on the UK government’s Companies House page on 28 May 2024, the administrators responsible for the sale of the online cycling retailer Wiggle Chain Reaction Cycles revealed that it was sold to Frasers Group for £3 million plus VAT.

Although at the time it was understood that the sale would be worth less than £10 million, it was unclear exactly where that figure sat.

The report also discloses that a private equity deal fell through before Christmas 2023. It wasn’t until February 22 that it was announced that a deal had been struck with Frasers Group to acquire the brands.

The value of this sale comes as a stark contrast to the brands’ previous acquisitions. Back in 2011, Wiggle was purchased by Bridgepoint, a private equity firm, for £180 million. Wiggle merged with Chain Reaction Cycles in 2016 under the new company of Wiggle CRC, which was sold to German conglomerate Signa Sports United, in an acquisition valued at $645 million.

In the Companies House report, it is detailed that the sale to Frasers Group was carried out in two parts, firstly with a payment of £2.65 million that was “paid on completion with an agreed retention to be paid once all necessary transfers of the intellectual property had been concluded”.

The report went on to state: “This aspect was successfully concluded and the balance of consideration has been paid in full.”

The sale to Frasers Group came two months after the collapse of a planned sale to a global private equity fund. A Sales and Purchase Agreement was signed and a completion date was set for December 19, but when this came around the buyer backed out.

“Despite considerable due diligence and time invested by management and the Administrators’ staff, the proposed purchaser withdrew their offer on the day completion was due,” reads the administrators’ report.

The report outlines how the administrators ‘pivoted’ to see the business through Christmas trading, and made reference to the ‘historically difficult’ trading months of January and February as it sought a new buyer. The next stumbling block, however, saw the business’ operating fixed overheads get in the way of a sale on a ‘going concern’ basis, as proposed to the private equity fund.

The administrators pointed to the IT systems in particular, which were built on the mistaken assumption the business would achieve annual revenues in excess of £1b, as the cause for “the parties considering a going concern purchase to all fall away”.

The administrators then turned to trying to sell the business’ intellectual property on a ‘gone concern’ basis, which it ultimately achieved, selling to Frasers Group on 22 February.

News of Wiggle’s struggles first broke back in October 2023 when it entered administration as a result of its owner Signa Sports United losing $150 million in financial guarantees. Since then, the ongoing saga resulted in the brand selling off most of its stock, with the website being deactivated earlier in the year.

The website is now back up and running with a reduced offering. Currently only four brands offer road bikes on the website, with many of the well-known brands that were previously stocked currently not available.

With Wiggle now under the ownership of the Frasers Group, it brings both Wiggle and Evans Cycles under one umbrella. It is unclear at this time what this will mean for both retailers going forward.

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