Bike industry ‘ripe for M&A’ despite recent rollercoaster

A report by Houlihan Lokey has judged the bike industry ripe for a new wave of mergers and acquisitions (M&A) despite the trade’s recent whiplash-inducing boom and bust run.

With the market broadly expected to have largely dealt with its overstock problem in 2025, the report forecasts gradual recovery with significant upside in the medium to long term, with 2026 and 2027 marking “pivotal years for increased M&A activity and investment opportunities”.

“As such, smart investors will start the search for promising targets now, to be in prime position when the market bounces back.”

Polling more than 30 industry executives and over 10 industry-relevant financial investors, the report found that 81% expected more M&A across the industry going forward, with 68% optimistic about medium-term profitability.

A compelling eBike portfolio was judged to be paramount to remaining competitive (88%) while 100% agreed that brand strength will become more important going forward.

Feeding into that latter point, 69% said expanding their role in the supply chain – and partially manufacturing components in-house will be a key topic in the coming years. Retailers and workshops may well be exasperated at the prospect of more bikes built with in-house components, potentially adding burden on carrying an ever-increasing variety and volume of spares.

Bike dealers themselves were judged to remain the most important sales channel in the future, by 80% of those polled. However, the report also indicated traditional bike brands will need to establish or expand D2C channels or click and collect capabilities to remain competitive.

More generally, the prospect of more M&A activity appears likely in a downturn. Indeed we’ve seen cash-rich groups like Frasers moving for smaller – and larger – retailers who’ve struggled in the bike trade’s economic nadir. Yet the research found that M&A activity peaked in the prior year – probably before the overstock challenge sucked the momentum out of the Covid bike industry boom.

If you’re mulling M&A in the cycling industry then it’s probably worth digging into the numbers in this report from Houlihan Lokey. And if you’re looking for further insight into the cycling market, its current state and future trends – focusing on that aforementioned sales channel that is the independent bike dealer – Cycling Industry News’ Market Data is worth a look, we’d argue.