RevTech program manufacturer to buy Global Motorsport Group

01/02/2008 by info.

AS the aftermarket gathers at Cincinnati for the 8th annual V-Twin Expo, the future of Custom Chrome appeared to be closer to resolution with the announcement that Global Motorsport Group (GMG) had agreed to sell its assets to Dae-Il USA, Inc “as a going concern”.

An announcement from GMG on January 31st stated that the sale includes all of GMG’s US operations. This includes the Custom Chrome, Motorcycle Stuff, and Jammer divisions, and the stock of Global Motorsport Group GmbH, which manages all of the group’s European operations which, principally at this time, means the profitable Custom Chrome operation out of Bad Kreuznach in Germany.

The statement said that in order to facilitate the sale process, the company filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

The Korean Dae-Il corporation is the company that has been manufacturing the RevTech program of engines and transmissions for Custom Chrome since the line made its market debut a decade or so ago.

Speculation about the company’s future has been gathering pace in recent years, and became especially intense in the past three months, once it became known that GMG owner Cerberus Private Capital would listen to proposals aimed at taking the company forward.

The announcement states that “the Company has reached an agreement with its lender to provide debtor-in-possession financing, subject to Bankruptcy Court approval, to fund the Company’s business operations while it completes the sale process. This financing will provide the Company the necessary funds to continue operations in the normal course of business, keeping all of the Company’s distribution facilities open on normal schedules, and fulfilling customer orders. The Company does not foresee any changes in employee numbers or facility locations.

“The purchase agreement is subject to the approval of the Bankruptcy Court. Definitive documents will be filed with the court, along with bidding procedures noting that qualified bidders will be provided an opportunity to make higher and better offers for the purchase. It is anticipated that the sale will be completed within 45 days. .

Scott Avila, Chief Restructuring Officer of GMG, is quoted as saying that “we are pleased to have entered into an agreement to be acquired by Dae-Il USA and are confident that this transaction will position GMG to re-establish its leadership position in the marketplace. We have carefully reviewed our options and believe that a sale will provide the best long-term prospects for the Company’s customers, vendors and employees”.

The deal sees former CEO Nace Panzica return to lead the business with which he was synonymous until his exit some eight years ago. “We look forward to supporting GMG’s success and continuing operations as a stand-alone business,” Panzica said in his capacity as President of Dae-Il USA.

As one of the original founders of Custom Chrome in 1970, and the man widely credited with managing the business to market leadership, the market will hope that Panzica’s reconnection with the business is a signal that this latest twist in the troubled recent history of the company will mark a watershed in its fortunes.

“We are committed to investing in GMG’s product lines and outstanding customer service. With the continued support of our faithful employees, loyal customers and valuable vendors, I am confident GMG’s future will be a success,” he went on to say.

The release stated that senior GMG representatives will attend at the 8th Annual V-Twin Expo by Easyriders being held in Cincinnati beginning on February 2, 2008, and that via its Motorcycle Stuff division it will also exhibit at the International Powersports Dealer Expo in Indianapolis beginning on February 16, 2008.

The company says that the transition of control to the new ownership should be concluded by March 2008.

Posted in Editorial | Print | No Comments »