Mad Fiber now gone too... meh, Divine Cycling Group

[aosty]

http://www.bicycleretailer.com/north-america/2013/10/30/mad-fiber-shuts-down-may-be-headed-bankruptcy

http://www.wheelfanatyk.com/blog/onward-upward/

What's the scoop on these guys? They're 0 out of 3.... :bike:

Serotta
Blue
Mad Fiber

All gone.

[MattTuck]

yeah, what is the opposite of the midas touch?

I never rode on Madfiber wheels, but I got the feeling that they finally delivered on the promise that Spinergy and R-sys had failed to live up to.

From an outsider, they certainly looked good.



I feel for the regular employees of these companies that are now jobless because of DCG's half-witted, half-capitalized and half-assed attempt at a roll-up strategy.

[sales guy]

Guess its good I didn't take the sales managers job there now. But I will tell my wife(who didn't want to move) and now I will hear I told you so! Fock!!! I hate giving her a win.

[zetroc]

yeah, what is the opposite of the midas touch?


the merde-is touch? :banana:

[David Kirk]

Guess its good I didn't take the sales managers job there now. But I will tell my wife(who didn't want to move) and now I will hear I told you so! Fock!!! I hate giving her a win.

You could paint it differently I suppose...........like........if you had taken the job you would have turned that ship around and it would be floating high and dry!

dave

[CunegoFan]

Who ends up with the IP? I hope it is not DCG.

[handsomerob]

You could paint it differently I suppose...........like........if you had taken the job you would have turned that ship around and it would be floating high and dry!

dave

The head engineer of the engine room can keep the engines running great, but can't help if the captain steers the ship into a rocky shore.

[KidWok]

Wow...they went from announcing they had more than $1B in capital in February at the time of DCG forming to having two businesses completely gone and one on the rocks in October. How the heck did that happen?

Tai

[R2D2]

I guess Mavic CCU is it.
Top dog in the carbon spoke arena.

[yngpunk]

And how is this DCG's fault? From the BRAIN article: "A source familiar with the situation said DCG is negotiating with Mad Fiber's creditors to work out a settlement; if those negotiations don’t work out, Mad Fiber will declare bankruptcy, the source said."

Sounds like Mad Fiber was already significantly in debt and unable to pay its bills before DCG came around. You can blame DCG for not doing its due dilligence when initial acquiring Mad Fiber, but can you blame them for not putting capital into a business that seems to have already been failing before it was acquired?

[sales guy]

The head engineer of the engine room can keep the engines running great, but can't help if the captain steers the ship into a rocky shore.


Lol!! Brilliant on both.

I'm good at my gig. Would have been nice to see what I could have done. I am curious what the original NSM has to say, or the DCG hired NSM. I know both well. I'll have to give them a ring and see.

[MattTuck]

And how is this DCG's fault? From the BRAIN article: "A source familiar with the situation said DCG is negotiating with Mad Fiber's creditors to work out a settlement; if those negotiations don’t work out, Mad Fiber will declare bankruptcy, the source said."

Sounds like Mad Fiber was already significantly in debt and unable to pay its bills before DCG came around. You can blame DCG for not doing its due dilligence when initial acquiring Mad Fiber, but can you blame them for not putting capital into a business that seems to have already been failing before it was acquired?

From reading the threads on this forum concerning DCG, the impression I got was that DCG promised capital to these firms to get them onboard, but then reneged on the promised capital (presumably because DCG could not raise promised capital from other investors) leaving the firms in the lurch.

Had DCG (and their big promises) not been present, the firms may have dialed back their plans for growth and spending. No way to know for sure, since probably just a few people have the inside information.

[cfox]

Wow...they went from announcing they had more than $1B in capital in February at the time of DCG forming to having two businesses completely gone and one on the rocks in October. How the heck did that happen?

Tai

The $1B refers to money raised in their prior careers.

Over their respective careers, Gary and Dan have collectively raised over $1 billion in capital to drive the growth of manufacturing and high-tech companies across a wide range of sectors, including health, fitness, packaging, and biotechnology.

I would be shocked if the combined acquisition costs of Blue, Serotta, and Mad Fiber reached six figures. Those three brands were in debt and had little/no brand value. They were acquired with the promise of further capital infusions which never came.

[yngpunk]

From reading the threads on this forum concerning DCG, the impression I got was that DCG promised capital to these firms to get them onboard, but then reneged on the promised capital (presumably because DCG could not raise promised capital from other investors) leaving the firms in the lurch.

Had DCG (and their big promises) not been present, the firms may have dialed back their plans for growth and spending. No way to know for sure, since probably just a few people have the inside information.

Interesting hypothesis and in the end, we the general public probably won't know the full story. However, companies don't go from running well to bankrupt in a matter of months.

This sounds like a good corporate communications class for how DCG should have behaved. Probably too quick to announce their grandious plans for Serotta, Blue, and Mad Fiber...probably should have waited until at least the ink dried, so when it all came crashing down, no one needed to know. :rolleyes:

[rice rocket]

Who ends up with the IP? I hope it is not DCG.

I'm curious as well.

I bet it'll be sold to the highest bidder, I'd hate to see it die because of intellectual property issues though.

[weiwentg]

From reading the threads on this forum concerning DCG, the impression I got was that DCG promised capital to these firms to get them onboard, but then reneged on the promised capital (presumably because DCG could not raise promised capital from other investors) leaving the firms in the lurch.

Had DCG (and their big promises) not been present, the firms may have dialed back their plans for growth and spending. No way to know for sure, since probably just a few people have the inside information.

or for all we know DCG never intended to commit the capital and just wanted the intellectual property for whatever reason.

[jpw]

I'm curious as well.

I bet it'll be sold to the highest bidder, I'd hate to see it die because of intellectual property issues though.

i think i'd rather have the factory, the machinery, the craftsmen and women, and the know how rather than a folio of ip.

[rice rocket]

i think i'd rather have the factory, the machinery, the craftsmen and women, and the know how rather than a folio of ip.

I'm assuming that they recorded all the important details into patents. Not sure how the factory, machinery, etc. can operate unless you come to a licensing agreement with whomever was the highest bidder.

[CunegoFan]

I would be shocked if the combined acquisition costs of Blue, Serotta, and Mad Fiber reached six figures. Those three brands were in debt and had little/no brand value. They were acquired with the promise of further capital infusions which never came.

I think Mad Fiber had quite a bit brand value, unlike Serotta and Blue. Mad had a distinct and rather unique product. There was a high "cool" factor based on the product's looks. Aside from debt, they evidently they had manufacturing problems, which might have been solved with an injection of capital. This company is probably the biggest loss of the three.

[aosty]

That's pretty much the way I see it also.


From reading the threads on this forum concerning DCG, the impression I got was that DCG promised capital to these firms to get them onboard, but then reneged on the promised capital (presumably because DCG could not raise promised capital from other investors) leaving the firms in the lurch.

Had DCG (and their big promises) not been present, the firms may have dialed back their plans for growth and spending. No way to know for sure, since probably just a few people have the inside information.

[David Kirk]

The head engineer of the engine room can keep the engines running great, but can't help if the captain steers the ship into a rocky shore.

Exactly - 'FULL STEAM AHEAD!!!!' :)


dave

[rnhood]

I think Mad Fiber had quite a bit brand value, unlike Serotta and Blue. Mad had a distinct and rather unique product. There was a high "cool" factor based on the product's looks. Aside from debt, they evidently they had manufacturing problems, which might have been solved with an injection of capital. This company is probably the biggest loss of the three.

The fact that they could not find capital from investors leads me to think their business plan was not in the best of shape...nor where the company financials.

While DCG took on some risk in acquiring them, I don't think they spent any more than the existing asset value...which I doubt was very much since it doesn't appear they employed much of an industrialized process in manufacturing the wheels. If they had any intellectual property/patents that were of value, then other investors/wheel manufactures would have been courting this....which apparently there weren't any. Capital infusion may have resolved most of their manufacturing issues (which there were some), but DCG couldn't make the business case pan out. It was time to write it off and move on.

The boutique wheel business is like the boutique bike business, in that the product needs to exhibit stellar performance and reliability. When they don't, they don't last long.

[sales guy]

My worry is they had said they planned on upwards of TEN acquisitions a year depending on value and capital.

I worry what they are going to do next year.

[laupsi]

That's pretty much the way I see it also.

number one rule in life and in business; don't spend money you don't have.

[zap]

I guess Mavic CCU is it.
Top dog in the carbon spoke arena.

Top dog was and still is Lightweight.

[R2D2]

Top dog was and still is Lightweight.

Forgot about Lightweight. Yea they win.

[Lovetoclimb]

If I was someone who paid $2k+ for those wheels I would be very unhappy. A high up in the company came by the shop I was working in a while ago and offered me the industry employee deal which was $1300 iirc. A good price, but what bike shop employee even has that kind of spending money!?

Is it just me or does the fad of ridiculously overpriced carbon wheels seem to be slowing?

[BumbleBeeDave]

From reading the threads on this forum concerning DCG, the impression I got was that DCG promised capital to these firms to get them onboard, but then reneged on the promised capital (presumably because DCG could not raise promised capital from other investors) leaving the firms in the lurch.

Had DCG (and their big promises) not been present, the firms may have dialed back their plans for growth and spending. No way to know for sure, since probably just a few people have the inside information.

They bought Serotta based on their promise to provide funding, then turned around and told Ben and Bill there would be no further funding forthcoming.

Without money in the bank, Ben and Bill took the only action they could--they announced they would use their small remaining stock of capital to professionally, successfully fill remaining pending orders and then shut down production. DCG came back and used this as an excuse to fire them for doing what they essentially were give no choice EXCEPT to do.

Your new boss tells you to keep the company running, but gives you no money to pay employees or other overhead. Exhaustive past Serotta business analysis aside, with only a couple of weeks worth of cash left, what else could they do? IMO they were backed into a corner and maneuvered into getting fired.

Thus my low personal opinion of DCG . . . Actually way below "low."

BBD

[CunegoFan]

The fact that they could not find capital from investors leads me to think their business plan was not in the best of shape...nor where the company financials. ..

That may be. I am just saying Mad Fiber had something unique and lots of cyclists were aware of the product.

What was Blue? A six person company that was one of dozens of small to medium sized companies that sell Asian-made carbon frames that are little different than a no-name carbon frame with a paint job. When the DCG announcement was made, many on this forum were unaware of Blue.

What was Serotta? A damaged brand that was facing competition from a rising tide of small and medium size artisan builders that have much more cachet and cheaper frames.

I think it is sad Mad Fiber is gone because I can envision myself buying their product (if the clincher issues were fixed). Not so much for Blue and Serotta.

[CunegoFan]

My worry is they had said they planned on upwards of TEN acquisitions a year depending on value and capital.

I worry what they are going to do next year.

Maybe we can convince them to buy Trek and Specialized.

[rice rocket]

If I was someone who paid $2k+ for those wheels I would be very unhappy. A high up in the company came by the shop I was working in a while ago and offered me the industry employee deal which was $1300 iirc. A good price, but what bike shop employee even has that kind of spending money!?

Is it just me or does the fad of ridiculously overpriced carbon wheels seem to be slowing?

Why is that surprising to you? Bike parts have always been marked up heavily (as you should know), but even more for boutique parts, where turnover is rather low.

[54ny77]

If an entity formerly owned by Divine Cycling Group dies, does it go to bike parts maker heaven? What if they made bad parts? Does the tangible stuff drift to unsold bike parts purgatory, a.k.a. backcountry dot com?

[sales guy]

Maybe we can convince them to buy Trek and Specialized.



God I wish!!!

[cfox]

If I was someone who paid $2k+ for those wheels I would be very unhappy. A high up in the company came by the shop I was working in a while ago and offered me the industry employee deal which was $1300 iirc. A good price, but what bike shop employee even has that kind of spending money!?

Is it just me or does the fad of ridiculously overpriced carbon wheels seem to be slowing?

Don't think so. Enve Smart rims are like a 2 month wait right now, and that's after they added another production shift.

[gavingould]

i wouldn't expect to see DCG "acquire" or "partner with" anything/anyone else.

if your company is already so bad off that you needed DCG to bail you out and believe they can actually do it, you might as well just close up now and go out on whatever reputation you had left. the only track record they have is near-instant implosion and dismantling of already-failing businesses.

guess most of us who had any interest didn't know that MadFiber was in such bad shape with creditors?

[PaulE]

Divine Intervention?

yeah, what is the opposite of the midas touch?

[rustychisel]

Maybe we can convince them to buy Trek and Specialized.

yeah, my thinking was along those lines too.:banana:

[WickedWheels]

Now who wants these guys to handle their investments?

http://bradwayfinancial.com/wp-content/uploads/2011/05/bradway_team-1028x321.jpg

http://bradwayfinancial.com/

[rice rocket]

Shirt too big, pants too high. NO WAY!

[zetroc]

Ugly tie too wide for tiny head...

[Brian Smith]

Now who wants these guys to handle their investments?

http://bradwayfinancial.com/wp-content/uploads/2011/05/bradway_team-1028x321.jpg

http://bradwayfinancial.com/

They didn't start a financial advisory with proceeds from manufacturing. They are probably very adept at handling investments. Whether or not you want them to handle your manufacturing contract is I think an issue that can be separated cleanly.

[dyerwolf]

I'm gonna run far from anything else these fools are a part of but I do feel for the earnest hardworking employees of the now defunct companies. It surely seems the way DCG brass is running their ship is the way Captain Francesco Schettino ran the Costa Concordia. :(

[josephr]

If I was someone who paid $2k+ for those wheels I would be very unhappy. A high up in the company came by the shop I was working in a while ago and offered me the industry employee deal which was $1300 iirc. A good price, but what bike shop employee even has that kind of spending money!?

Is it just me or does the fad of ridiculously overpriced carbon wheels seem to be slowing?

I sure as heck hope so...I'm on a facebook swap group as well and recently a local LBS posted a huge sale on a large inventory of carbon wheels. $2500 Zipps were marked-down to $1600 etc....I feel sorry for the dude that paid full retail. I'm sure next spring the market for overpriced carbon wheels will take off again though. Folks get excited when the season hits and start buying parts. Just like there's always a spurt of TV sales at the beginning of football season, new lawn mowers in spring, new grills during summer, prostitutes during political conventions...
Joe

[bobswire]

Is Divine Cycling Group to Cycling Partners like WMD was to Iraq?

http://www.divinecycles.com/mission.php

I was willing to give them the benefit of the doubt but the secrecy,unresponsiveness and end result thus far seem devious at best and (legalized) outright theft at worst.

Financial Advisers/Planners businesses rely on trust, openness and results.

[rustylion]

I would say it another way: "Capable leadership cannot overcome ineffective company ownership."

The head engineer of the engine room can keep the engines running great, but can't help if the captain steers the ship into a rocky shore.

[rustylion]

In my mind, the below posts are linked.

It is true that MF may have been in trouble when acquired. It is shut down now and may have shut down anyway without any acquisition by DCGI.

But, my questions are:
1) if a professional investor does qualified and adequate due diligence and does not like what they see, then they walk away. DCGI did not walk away.
2) if a professional investor announces they have $1B in capital available to build a $200M industry leading company (from DCGI press releases), then they do. $1B does not dry up in months. I guess DCGI did not the capital.
3) if a professional investor only wants to use part of their own capital to fund the business (or turnaround) and then seek outside equity, they combine their reputation with a clear business plan and term sheet. I guess that real investors ran when they connected with the lack of reputation and experience at DCGI plus DCGI's inability to put together business plans and term sheets that made sense.

So, what was the point, DCGI, except for us to have another reality/comedy show to watch?

I have lots of opinions and emotions when it comes to investors that close companies, kill brands and disrupt employee lives. One of them is sadness. Even if MF was in trouble, they might have had investor options other than DCGI. DCGI's pre-acquisition hype probably convinced them DCGI was the best option which was obviously not true. No skin off DCGI's nose but it robbed MF of other more viable options if there were any.

I, for one, will shy away from anything that Divine, Bradway and Lake Rudd (and the principals, Dan Divine, Gary Ullman, Brian Case and Bill Overbay) touch in the cycling industry. There are other company/brand options to buy from who I can trust.

"Wow...they went from announcing they had more than $1B in capital in February at the time of DCG forming to having two businesses completely gone and one on the rocks in October. How the heck did that happen?"

And how is this DCG's fault? From the BRAIN article: "A source familiar with the situation said DCG is negotiating with Mad Fiber's creditors to work out a settlement; if those negotiations don’t work out, Mad Fiber will declare bankruptcy, the source said."

Sounds like Mad Fiber was already significantly in debt and unable to pay its bills before DCG came around. You can blame DCG for not doing its due dilligence when initial acquiring Mad Fiber, but can you blame them for not putting capital into a business that seems to have already been failing before it was acquired?

[BumbleBeeDave]

Ugly tie too wide for tiny head...

. . . their stems are also too short. :rolleyes:

Bill, you make some good points.

BBD

[verticaldoug]

On the DCG website, they claim to have raised over $1 billion over their careers. The reporter in the bicycle retailer piece wrote it like they have raised $1 billion now. A distinction is important. The business of finance is to mislead.

[yngpunk]

In my mind, the below posts are linked.

It is true that MF may have been in trouble when acquired. It is shut down now and may have shut down anyway without any acquisition by DCGI.

But, my questions are:
1) if a professional investor does qualified and adequate due diligence and does not like what they see, then they walk away. DCGI did not walk away.
2) if a professional investor announces they have $1B in capital available to build a $200M industry leading company (from DCGI press releases), then they do. $1B does not dry up in months. I guess DCGI did not the capital.
3) if a professional investor only wants to use part of their own capital to fund the business (or turnaround) and then seek outside equity, they combine their reputation with a clear business plan and term sheet. I guess that real investors ran when they connected with the lack of reputation and experience at DCGI plus DCGI's inability to put together business plans and term sheets that made sense.

So, what was the point, DCGI, except for us to have another reality/comedy show to watch?

I have lots of opinions and emotions when it comes to investors that close companies, kill brands and disrupt employee lives. One of them is sadness. Even if MF was in trouble, they might have had investor options other than DCGI. DCGI's pre-acquisition hype probably convinced them DCGI was the best option which was obviously not true. No skin off DCGI's nose but it robbed MF of other more viable options if there were any.

I, for one, will shy away from anything that Divine, Bradway and Lake Rudd (and the principals, Dan Divine, Gary Ullman, Brian Case and Bill Overbay) touch in the cycling industry. There are other company/brand options to buy from who I can trust.

"Wow...they went from announcing they had more than $1B in capital in February at the time of DCG forming to having two businesses completely gone and one on the rocks in October. How the heck did that happen?"

Ah yes, the mythical "white knight". In the end, you pays your money, you takes your choice.

In most likelyhood, probably errors on everyones part, which ultimately led to a sad ending. Unfortunately, we will never know what really transpired behind closed doors

[yngpunk]

On the DCG website, they claim to have raised over $1 billion over their careers. The reporter in the bicycle retailer piece wrote it like they have raised $1 billion now. A distinction is important. The business of finance is to mislead.

And the business of the news media is any differnt?

[rice rocket]

And the business of the news media is any differnt?

Sad, ain't it.

[bobswire]

And the business of the news media is any differnt?

Once the 4th Estate was sold and bought we were left to find the truth by our own devices. Case in point. http://www.fair.org/blog/2013/09/18/inform-the-public-not-my-job-says-chuck-todd/

[R2D2]

I guess my burning question is what is Divine's agenda in taking Serrota/Blue/Mad Fiber out?

Or is it incompetence?

[verticaldoug]

I guess my burning question is what is Divine's agenda in taking Serrota/Blue/Mad Fiber out?

Or is it incompetence?

Without knowing the structure of the deal, initial if any cash outlay etc, it is hard to 'guess' what they were really planning.

It was probably a combination of factors
1. underestimating the amount of hard work and time required to really turn
something around
2. Underestimating the cash needs
3. Underestimating difficulty and cost savings in moving manufacturing to Taiwan
or
4. The plan was to sell a turnaround without capital up front, to liquidate and make some money on the back end once in control.

[yngpunk]

Without knowing the structure of the deal, initial if any cash outlay etc, it is hard to 'guess' what they were really planning.

It was probably a combination of factors
1. underestimating the amount of hard work and time required to really turn
something around
2. Underestimating the cash needs
3. Underestimating difficulty and cost savings in moving manufacturing to Taiwan
or
4. The plan was to sell a turnaround without capital up front, to liquidate and make some money on the back end once in control.

5. Big dreams about owning/running/being in/changing/etc. the cyclying industry clouded better judgement.

[1centaur]

Nobody with their background has $1B in capital. Raising $1B over the course of 1 or more careers is piker territory if the careers in question are over 15 years long.

Not sure what selling a turnaround without capital, liquidating and making money on the back end really means. Liquidations are always worth a lot less than viable businesses, so unless one is a genuine liquidator (openly buying refuse at cents on the dollar with the stated intention to liquidate) a liquidation is a failure.

I don't believe anybody would trash their own reputation in the small company deal business by promising to turn around companies while planning all along to shut them down and claw a few cents of value from liquidations; that shuts people down for the rest of their potential deal making lives in a world of Google. It is much more likely that they overestimated their own ability to rationalize some undisciplined businesses (this is EXTREMELY common among small deal guys who have had SOME success). Guys who aren't "real" when it comes to capital very often try to fake it 'til they make it. But it won't just be targets that find DCG principals on Google, it will be capital providers.

[54ny77]

bradway got caught shorting toray at the beginning of the year.

and they lost a billion.

poof, there went the working capital.

or at least that's what i read on an internet post by someone who's cousin's uncle's nephew's boss's secretary's husband heard from a cabbie in midtown who heard about it from the repair garage's dispatcher's brother-in-law who was a janitor at stratton oakmont.

[oldpotatoe]

Nobody with their background has $1B in capital. Raising $1B over the course of 1 or more careers is piker territory if the careers in question are over 15 years long.

Not sure what selling a turnaround without capital, liquidating and making money on the back end really means. Liquidations are always worth a lot less than viable businesses, so unless one is a genuine liquidator (openly buying refuse at cents on the dollar with the stated intention to liquidate) a liquidation is a failure.

I don't believe anybody would trash their own reputation in the small company deal business by promising to turn around companies while planning all along to shut them down and claw a few cents of value from liquidations; that shuts people down for the rest of their potential deal making lives in a world of Google. It is much more likely that they overestimated their own ability to rationalize some undisciplined businesses (this is EXTREMELY common among small deal guys who have had SOME success). Guys who aren't "real" when it comes to capital very often try to fake it 'til they make it. But it won't just be targets that find DCG principals on Google, it will be capital providers.

Too bad this has become personal to some but I believe the above. Divine didn't have a personal vendetta against these 3, it was business. They threw
'something' at these 3 undisciplined and in serious financial trouble, companies, thought there was $ to be made..there wasn't. I think all you can accuse DBG of is being inept or at least not doing their homework.

[rustylion]

i know the inside details...
...happy to share them....

...but, it's incompetence.

really...it's true.

I guess my burning question is what is Divine's agenda in taking Serrota/Blue/Mad Fiber out?

Or is it incompetence?

[rustylion]

so, if you are right, what does that all say about the investors (Dan Devine, Brian Case, Gary Ullman and Bill Overbay)??
who are are surely embarraised by these four who are trying to profess to be among the "Real Deal" invstors who are the ones that do this day in and day out who really do deals and make deals work....

Dan, Brian, Gary and Bill (Overbay) are a joke.

Without knowing the structure of the deal, initial if any cash outlay etc, it is hard to 'guess' what they were really planning.

It was probably a combination of factors
1. underestimating the amount of hard work and time required to really turn
something around
2. Underestimating the cash needs
3. Underestimating difficulty and cost savings in moving manufacturing to Taiwan
or
4. The plan was to sell a turnaround without capital up front, to liquidate and make some money on the back end once in control.

[rustylion]

Sad.

Very, very sad that these type of people are tolerated in the cycling (or any) industry.

They should enjoy their current wealth.....and, just go away and leave us alone....

Sad, ain't it.

[rustylion]

of those that can never achieve the reality of people with talent and competience....

Dan, Brian, Gary and Bill are wannabes wishing they could become equal to investors with come talent and competence.....''

Well, after closing down their first 3 acquisitions in a matter of months, i suppose we now know the probablitility that wannabe might convert to professional....

nada, zip, zero. never.


5. Big dreams about owning/running/being in/changing/etc. the cyclying industry clouded better judgement.

[wasfast]

rustylion, what's next for you, if anything, on the business side?

[ultraman6970]

Is blue out of the picture too??

[sales guy]

Is blue out of the picture too??



Blue has been shut down since end of August.

[ultraman6970]

I imagine that at some point all the old inventory will be liquidated?

[sales guy]

I imagine that at some point all the old inventory will be liquidated?


I don't think there will be much as they didn't have a lot due to not having cash. They didn't list 2013 bikes only 2014 and those never made it state side. My guess is anything that was there is gone either back to Asia or was pushed out while the sales people were there. "To make room for the new model year product". The usual line works, even when you have issues and won't be there for the new model year.

Supposedly the Skop bros are trying to find a buyer. But it's been months so I doubt it.

[xjahx]

I think all you can accuse DBG of is being inept or at least not doing their homework.

Agree 100%. We sing praises now to these lost companies that were already on a downward spiral long before DCG approached them with hopes and dreams of saving and prospering.

Interesting read on MF: http://forums.bicycling.com/topic/ya-gotta-be-mad-to-buy-mad-fiber?nc=1

http://forums.bicycling.com/fileSendAction/fcType/0/fcOid/56324576559035942/filePointer/56324576559063628/fodoid/56324576559063623/imageType/LARGE/inlineImage/true/Web.jpg

I hope that their solution to their delamination problem is open source.

[54ny77]

Wasn't each company that DCG tried to step in to buy/consolidate/takeover/sell/whatever, for the most part DOA in the first place?

It's kind of comical to read all this blame and vitriol on an entity who tried (and clearly failed, for any number of reasons) to come in and turn around bike-related companies that were already ran into the ground by their leadership.

The buck stops at the top, and each person at the top at each of those companies lost their business. Period. End of story.

All the rest is background noise.

[oldpotatoe]

Wasn't each company that DCG tried to step in to buy/consolidate/takeover/sell/whatever, for the most part DOA in the first place?

It's kind of comical to read all this blame and vitriol on an entity who tried (and clearly failed, for any number of reasons) to come in and turn around bike-related companies that were already ran into the ground by their leadership.

The buck stops at the top, and each person at the top at each of those companies lost their business. Period. End of story.

All the rest is background noise.

Wasn't each company that DCG tried to step in to buy/consolidate/takeover/sell/whatever, for the most part DOA in the first place?

Yep

It's kind of comical to read all this blame and vitriol on an entity who tried (and clearly failed, for any number of reasons) to come in and turn around bike-related companies that were already ran into the ground by their leadership.

Agree

The buck stops at the top, and each person at the top at each of those companies lost their business. Period. End of story.

All the rest is background noise.

10-4...I get the personal vitriol and all but like I said it was business, bad business but business nonetheless.

[laupsi]

Sad.

Very, very sad that these type of people are tolerated in the cycling (or any) industry.

They should enjoy their current wealth.....and, just go away and leave us alone....

sorry Bill but "tolerated"? they had the means to get in, they got in. your strategy to keep them out failed too did it not?

[1centaur]

I have seen the deal making world at the low end (DCG) and the high end (say, Heinz) and everything in between. The capabilities of the buyers are very different, both in terms of capital and talent. The first tends to find the last, eventually. But the emotions of the bought are very similar: they hope the buyers are good, keep their promises, know how to achieve their goals, and have the capital to pay for future success. These hopes are rarely fully rational, since one can't assure success by getting D&Bs or reading news stories on Google. Just as a local banker looks a prospect in the eye and green lights a small business loan, so does a company owner reach across the table and shake the hand of somebody who offers money and a business plan to take things to a better level. So when it goes horribly wrong, it FEELS personal, and embarrassing, because one person believed what another person said, and that second person SHOULD have known that the odds of success were low and did not convey that properly. To the extent the bought is a little desperate, it's all the easier to believe and trust in the buyer; that trust feels betrayed when things go wrong. I am never comfortable with the phrase "it's just business" because business at many levels IS personal.

If Serotta et al had been doing really well when DCG came along perhaps the belief required to do the deal would have been harder to acquire. But remember that small businesses might have almost no experience in deal making and have not seen the pattern of small guys faking it 'til they make it. And people like DCG MUST fake it 'til they make it to proceed; capital does not flow easily to such small deal guys because the risks are too high. They could be the most honest, talented and sincere people on the planet and they would still find it hard to get capital. So those who have been faked to will naturally resent those who were faking, if things don't turn out right.

[xjahx]

Great points, 1centaur. Let's also keep in mind that this is not Serotta's first rodeo, naively taking the money and promises of investors. In fact, from the outside, many more investors of the years would say that they, not serotta, were sold false hopes and dreams. As Gary Smith said, "I hope they got nice bikes out of the deals."

[BumbleBeeDave]

sorry Bill but "tolerated"? they had the means to get in, they got in. your strategy to keep them out failed too did it not?

The company was purchased by Bradway before Bill was anywhere nearby. As I understand it, he was hired by Case to run the company after Case purchased it. Then Case, as owner, decided to merge with DCG. What exactly would Bill, as an employee, have done to "keep them out?"

Lock the factory door? Roll around on the floor and throw a tantrum? Use his "jedi mind tricks?"

I don't get it. What kind of "strategy" was he supposed to have to keep them out?

BBD

[laupsi]

Pardon my ignorance on the time sequence. My point, they got in legitimately.

[xjahx]

BBD: He may not have been the one who opened his arms or had the authority to sign on the doted line, but the accountability with this failure rests with Medway and the team that they assembled to create a sustainable business.

Is it really shocking that DCG removed the senior executives who had just failed to keep the company of away from receivership or the verge of bankruptcy? Medway and their executives failed to create a company that was not dependent on the infusion of capital to persist. End of game; please step away from the plate. You struck out.

Insert Blue, Madfiber, or any other business for Medway, and the play is the same.

[BumbleBeeDave]

. . . but I think there are some assumptions being made here without detailed factual information to base them on.

Unless we have detailed financial numbers for Serotta during the time since Bradway bought them, we can't know for certain what the situation was--how close they really were to bankruptcy.

But since there seem to be so many assumptions being made, I'm going to make a few also about what the situation was that Bill was trying to deal with when he was hired . . .

--The company's dealer network was in bad shape and their reputation among dealers (and potential dealers) was not good.

--The company's public reputation among potential buyers was in similar sad shape.

--Reputation damage control and rehab were badly needed.

--The company had no lower price point models to get new owners into the brand.

Watkins had to get on board, analyze the situation, create a business plan to stop the downward slide, rehab the rep among dealers, create a respectable online presence, and initiate and follow through to production and sales on at least one totally new model (Pronto and Fondo) at the lower price point. He had to meet production cost goals in order to sell the product and make a profit in spite of the higher inherent costs of producing such a product domestically, then sell it to dealers who assumed the worst about the company from previous experience.

That's a pretty full plate--and when the bus is heading downhill at increasing speed, you don't just walk in the door and wave a magic wand to stop it cold and turn it around. Unless we get some more detailed info, I don't think we will ever know how close the curve was to bottoming out and heading back up.

But from my point of view, Bill was making the right moves, following a business plan approved by Bradway, when the rug was yanked out from under him.

BBD

[xjahx]

Good points, BBDave, and I agree. From this sideline, Bill W. did attempt to make changes for the better and was making progress. We will never know the extent to which the new Medway team was already behind the eightball or what the goals of Medway were in both obtaining the company and then in dealing with DCG.

[aosty]

meh

http://www.bicycleretailer.com/industry-news/2014/01/14/mad-fiber-assets-be-auctioned-month

Mad Fiber assets to be auctioned this month
Published January 14, 2014
by BRAIN Staff

SEATTLE (BRAIN) — You may have seen the ad on this very site: The remaining assets of the Mad Fiber wheel company are going on auction this month. The trustee of the bankrupt company has listed the assets — mostly intellectual property and some tooling — with Randy L. Fridkis Auctions, which operates auctionsaleinfo.com. Bids in the online auction will be accepted starting Jan. 24; the auction closes at 4 p.m. Pacific time Jan. 28.

On Dec. 2, DCG Wheels, the former maker of Mad Fiber Wheels, filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court for the District of Delaware. Less than two weeks later, DCG’s parent companies, Divine Cycling Group Inc. and Divine Cycling Group International (DCGI), separately filed for bankruptcy.

Charles Forman, the court-appointed bankruptcy trustee, recently emailed people who had expressed interest in DCG’s assets. CC’d on Forman’s email (which one recipient shared with BRAIN) were personnel at American Classic, BMC-Switzerland, Advanced Sports International, Pacenti Cycle Design and Wiggle.

The auction items can be viewed at the former Mad Fiber factory at 1604 North 34th Street in Seattle on Jan. 24 from 10 a.m. to 4 p.m. The factory building itself was leased by Mad Fiber and is not being sold at the auction.

According to an overview of the intellectual property provided by Fridkis, the assets include various original, provisional and pending patents in the U.S. and elsewhere. The intellectual property is bundled together as Lot 2, while hardgoods, including manufacturing equipment, make up Lot 3 of the auction. Lot 1 allows bidders to make a bulk bid on the entire combined Lots 2 and 3.

The hardgoods up for auction include everything from ladders and bar stools to worktables, a fork lift, Park TS-2 truing stands, bike pumps, Mad Fiber’s trade show booth, hand tools and more. The auction does not include any Mad Fiber wheels.

[Louis]

The hardgoods up for auction include everything from ladders and bar stools to worktables, a fork lift, Park TS-2 truing stands, bike pumps

AHA !!!!! I knew it - those wheels do need to be trued...

[aosty]

They're trued using a forklift?!

:eek::banana:

[beeatnik]

Madfiber - "High Tech Wheels, Low Tech Business"

[zetroc]

Madfiber - "High Tech Wheels, Low Tech Business"

That's kind of unfair. They were forced out of business after their buyer declined to fund their operations.

[cromo900]

most detailed factory visit ever: http://randylfridkisauctions.auctionflex.com/showlot.ap?co=697&weid=38876&weiid=14193826&archive=n&lso=lotnumasc&pagenum=1&lang=En#images

[Louis]

Seems to me that all you could do with the tooling and the jigs is build more MF wheels. I wonder if anyone out there is willing to try?

[parris]

Not knowing anything about composites what are the freezers used for?

[don'TreadOnMe]

Sad. Some cool people building cool things.
Time to start some new dreams.

[oldpotatoe]

That's kind of unfair. They were forced out of business after their buyer declined to fund their operations.

Not exactly. They were in big trouble, and Divine bought a troubled company, and let them die but they were already sick.

[Louis]

Not knowing anything about composites what are the freezers used for?

Epoxy that has not yet been mixed or used lasts longer if you store it at low temps.

Edit: The above statement may be wrong - I did some quick double-checking on the web, and apparently the resin isn't as sensitive to storage at room temperature as I thought.

It isn't really my area, so I'll defer to someone who does know what he's talking about.

[aosty]

most detailed factory visit ever: http://randylfridkisauctions.auctionflex.com/showlot.ap?co=697&weid=38876&weiid=14193826&archive=n&lso=lotnumasc&pagenum=1&lang=En#images


wow

[RedRider]

One use of the refrigerators is storage for the pre-preg composite fibers used for carbon fiber manufacture. They require cool storage.

[xjahx]

I did not realize that these were built around an Alex rim core. Can anyone explain the process?

Also, besides the complete sets that someone will flip, I wonder what the value of the tooling truly is. Seems too specific, unless someone wanted to use this exact product under a new company

[sales guy]

I did not realize that these were built around an Alex rim core. Can anyone explain the process?

Also, besides the complete sets that someone will flip, I wonder what the value of the tooling truly is. Seems too specific, unless someone wanted to use this exact product under a new company


Complete wheels(built ready for sale) are not included in the sale. It's just fixtures and parts.

The pictures are misleading as they show wheels ready for sale. According to what I read, they are not for sale though.

[azrider]

i envision some person unrelated to the wheel industry and not really knowing what he was handling created this pile.........sad

http://auctionimages.s3.amazonaws.com/697/38876/30214921.jpg

[aosty]

I did not realize that these were built around an Alex rim core. Can anyone explain the process?



I noticed the Alex boxes too but I doubt they were off the shelf rims.... I'm guessing they outsourced the aluminum extrusions to Alex.

[tmf]

Complete wheels(built ready for sale) are not included in the sale. It's just fixtures and parts.

The pictures are misleading as they show wheels ready for sale. According to what I read, they are not for sale though.

At the bottom of the Lot description, it has several lines that say "Assorted Wheels"

(18) Cases of 10 each rims for Clincher 700C
Asst. Wheels on hangers
Asst. rims and wheels on mobile carts
Asst. wheels in grinding room
Asst. wheels
Asst. wheels
Asst. wheels
Asst. wheels
Asst. wheels
Asst. wheels

[don'TreadOnMe]

Alex rims were needed for the clincher version, Mavic's done something similar w/their Cosmic Carbone 40c.

The Madfiber tubies didn't use the aluminum extrusion/cap.

[xjahx]

We shall see where this heads, although I do not know if we can follow the final auction value.

[rice rocket]

Are they auctioning off the IP too? They mention in the top that they do provide these auction services, but don't really have it listed.