Pegasus Capital Advisors was awarded Buyouts Magazine's “Turnaround of the Year” award for its highly successful acquisition, rejuvenation and ultimate sale of Cannondale Bicycle Corp.
“The Connecticut-based buyout firm didn't shy away from Cannondale Bicycle's 11 consecutive unprofitable quarters, the possibility of a Chapter 7, or the specter of a complex Section 363 sale. Pegasus Capital saw the potential to revitalize the struggling company and did just that,” Buyouts Magazine wrote.
Founded in 1971, Cannondale was a highly innovative and respected brand that had fallen on hard times.
Pegasus acquired Cannondale in 2003. The article noted that despite revenues of $156 million in 2002, the company lost $15 million that year and was close to shutting its doors.
“We were not deterred by the difficulties that Cannondale was facing,” said Craig Cogut, co-managing Partner and the founder of Pegasus. “We saw the company's inherent value — its brand, its outstanding products and its full potential — and we were confident that we could return Cannondale to preeminence.”
After acquiring Cannondale in bankruptcy proceedings in 2003, Pegasus said it focused resources on greater R&D, shed the unprofitable motorsports division, brought in new management, and ultimately added Sugoi Apparel as an add-on acquisition. In 2007, NBA superstar LeBron James, a Cannondale customer, became a minority investor.
Under Pegasus' leadership, Cannondale revenues grew by 30% to $200 million and the company went from operating losses to EBITDA of approximately $20 million. In early 2008, Cannondale was sold to Dorel Industries, a publicly-listed Canadian company, for what Buyouts Magazine called a “stellar return.”
