Pitch Best Small Cap Deal 2021: Bolster Investments Partners – Optima Cycles 

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Involved firms and advisors   

 Involved firms and advisors buy side:  
JSA Tax (Tax Advisory), de Breij (Legal Advisory Corporate M&A), Eiger Law (Legal Advisory Corporate M&A Taiwan), Accuracy (Financial Due Diligence), Bolster Investment Partners (PE Management)  

Involved firms and advisors target:  
Haps Windroos Advocatuur (Legal Advisory Corporate M&A), Haps Consulting Ltd., & CPAs (Financial and Legal Advisory Taiwan)  

Involved firms and advisors sell side:  
Personal advisors seller, Haps Windroos Advocatuur (Legal Advisory Corporate M&A), Haps Consulting Ltd., & CPAs (Financial and Legal Advisory)  

Pitch  

Brief description deal / Deal outline  
Bolster Investment Partners (“Bolster”) acquired a 50% stake in Optima Cycles, the other 50% remains with the founder. Optima Cycles is specialized in designing, producing and distributing premium e-bikes and e-cargo bikes. It is active in the Netherlands, Belgium and Germany and operates under the labels Dutch ID and Lovens. Simultaneously with Bolster’s investment in Optima Cycles, sister company MM Bicycles, located in Taiwan, was acquired, and integrated into the group. The merger provides Optima with a unique position in the value chain with all steps of the production process taking place in-house, both for its own brands as well as for third parties, including Urban Arrow. The combination employs over 120 employees and realized a turnover of € 47 million in 2020.  

Why should this deal win the Award for Best Deal 2021?  
In terms of attractiveness and complexity the Optima deal is likely to be unmatched with any other small-cap deal in 2021. Bolster had the opportunity to invest in a fast-growing company via a bilateral process in a very competitive M&A market. From the first meeting to the finish the process took over 1 year, illustrating the invested effort and the complexity in finalizing the deal as one part of the transaction took place in Taiwan. From Bolsters perspective we were dealing with two transactions as the investment in Optima Cycles had to be realized while simultaneously acquiring MM Bicycles in Taiwan, which was eventually structured as an asset deal, with specific requirements due to the international nature of the transaction. This meant due diligence, transaction documentation and negotiations in twofold in different international regimes, thus requiring the utmost attention from all parties involved. This transaction took place during the COVID-19 outbreak and despite the challenging environment faced during the process in terms of complexity and unprecedented lead times in the supply chain, both parties managed to bring the process to a very satisfying end for all stakeholders involved Without having the opportunity to visit the site in Taiwan and to meet each other in person, this partnership was built through digital means!  

Deal rationale:  
The founder of the company was looking for a strong partner with the knowledge and expertise to support Optima in achieving the company's growth objectives. Optima is an innovative Dutch manufacturing company with a unique position in the value chain that fits seamlessly into the investment philosophy of Bolster, due to the attractive positioning of Optima Cycles within this fast-growing market.  

Optima operates a state-of-the-art assembly facility in Beverwijk, The Netherlands, housing among others the design and sales department, whereas the production of frames and the sourcing of parts takes place at the production site in Taichung, Taiwan. Optima has a unique position in the value chain with all steps of the production process taking place in-house. From design to production and to assembly, both for its own brands Dutch ID and Lovens as well as for third parties, including Urban Arrow. The R&D department is therefore able to bring new collections to the market in a relatively short time compared to competitors, allowing Optima to respond quickly to the latest trends. Optima Cycles’ e-bikes and e-cargo bikes are characterized by a modern design and an optimal riding comfort, underpinned by the recent awards of the Dutch ID bicycles in the ‘Consumentenbond Test’ and the ‘ADR Bicycle Test’. In addition, the Lovens – a premium electric cargo bike, introduced this year – has been received with great enthusiasm by specialist bicycle dealers and consumers because of its thoughtful design, quality and innovations. The premium production capabilities of Optima in this fast-growing market results in a very attractive outlook. By joining forces with Bolster, we are convinced that the success of Optima can be continued and accelerated.  

What is the impact of this deal for the company?  
The merger of Optima Cycles and MM Bicycles is an important strategic step in realizing a fully integrated supply chain. The combined development team can accelerate together and bring continuous development to a next level and mutually benefit from each other’s specific expertise. Moreover, Bolster can bring additional strategic and capital support to the table, strengthening the market position of Optima in the coming years and pursuing an active internationalization strategy.  

What is the impact of this deal for the direct stakeholders?  
With customer orders at continued high levels, COVID-19 is currently still impacting the stability of the value chain with global delivery disruptions which result in longer lead times for bicycles. Optima and Bolster are continuously looking for actions to mitigate supply chain effects of these disruptions as much as possible. With governments, cities, companies and consumers embracing the positive benefits of cycling for personal health, business and the environment, the future of Optima looks bright. Michael van der Meijden – founder of Opitma – still retains a 50% stake in the new combination and has the ambition to remain active in his current role for many years to come within the company, dividing his time between the sites in Taiwan and Beverwijk. In Taiwan, Michael is involved in leading the operation and the sourcing activities. With Bolster as an equal partner, Michael is in the optimal position to continue his course as an entrepreneur and achieve his ambition, with support and capital from Bolster.  

What is the impact of this deal on society?   
The e-bikes market is growing rapidly, both in the Netherlands and internationally. The growth is driven by several trends, such as the increased focus on a healthier lifestyle and the rising demand for sustainable mobility solutions. The e-bike, for instance, is increasingly being used as a substitute for cars or other forms of mobility such as public transport. Growth is expected to prolong in the coming years. With the support of Bolster as a shareholder, Optima Cycles will focus even more on the growth of its own brands and international expansion.  

What was most complex about this deal?  
Complex transaction structure related to the acquisition of MM Bicycles in Taiwan. Due to the COVID-19 travel restrictions, the seller was not allowed to leave Taiwan to come to the Netherlands. All communication with the seller was via Teams or e-mail.   

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