Pearl Izumi has a new owner, and it seems to be a better fit this time around. Shimano Inc., the Japanese cycling and fishing gear maker, reached an agreement to buy Pearl Izumi for $69.5 million in cash.  Nautilus had put the cycling and running brand on the selling block last October. Nautilus acquired Pearl Izumi in July 2005 for approximately $68 million in cash and about $6 million in assumed debt.

The purchase includes sales and distribution rights for the Pearl Izumi brand in North America, Europe and Australia. It does not include Japan and most of Asia.  Pearl Izumi becomes a wholly-owned subsidiary of Shimano’s U.S. operations, but will continue to operate from its facilities in Broomfield, CO and Kirchzarten, Germany.  Current management, led by Juergen Eckmann, Pearl Izumi’s president, are staying on.


For Nautilus, the sale is part of an extensive turnaround plan that includes debt restructuring, layoffs and other cost containment moves. The fitness equipment supplier has already absorbed a $19.4 million charge related to the terminated acquisition of a plant in China, and will also record a loss on its investment in Pearl Izumi.


David Pfeiffer, president of Shimano American Corporation, based in Irvine, CA, told Sports Executive Weekly that the acquisition brings together two companies started by Japanese families sharing a passion for cycling.


“We weren't really looking for an acquisition,” said Pfeiffer. “But we were open to an acquisition of a strategic type and this one kind of came along at an opportune time and we jumped on it. The deeper we looked at it, the more we liked what we found.”


In particular, Pearl Izumi adds a cycling apparel offering for Shimano in the U.S. market, where Shimano cycling apparel does not have a presence.


For much more on the Pearl deal, including expanded interviews, see this week’s issue of The B.O.S.S. Report…