Chicago-based manufactuer SRAM, owners of the SRAM, Rock Shox, TruVativ, Avid and Pit Stop brands just announced they are looking for some cash. Although the press release indicates that they aren't in any trouble, that they "don't need to do this" the urgent nature of the deal seems to indicate otherwise.

SRAM did $400 million in sales last year with over 2,500 employees. Executives say they are trying to double this number over the next few years. However, getting the financing needed to reach that growth has become increasingly more difficult in the last 6-9 months. Therefore, it comes as little surprise to see SRAM  actively seeking an investor by the end of the summer. Someone that can provide the needed cash and resources that the banks cannot.

This isn't neccesarily a bad thing, however. Earlier in the year it was announced that Fox Racing Shox would be bought by an invenstment company in Conneciticut. The end result there? So far the buyer has sunk tons of additional money into the company, including marketing (which benefits everyone). Hopefully SRAM finds a solid financial partner when the smoke clears on this process. Full press release below:

CHICAGO, IL —SRAM, a company that has grown from six employees to more than 2,500 with offices and factories worldwide, is seeking an investor to be a strategic financial partner.

Stan Day, president and chief executive officer, said the company has retained J.P. Morgan to lead the search.

“We have a book on the street. J.P. Morgan is running the process for us, and we’re looking for a minority financial investor,” he said. “We’ve gotten to the size where we’ll be a little over $400 million revenue in our model year ending June.

“We feel it's important for the organization to add some breadth and depth to the ownership structure beyond being a family and management-owned company,” Day said. “We expect a partner to be selected in the August time frame."

There will be no change in the company’s management. The decision to seek an investor was something “we don’t need to do,” said Day, describing the process and objective as building a long-term foundation for the future. “Let’s pour that concrete now,” he said.

SRAM, founded in 1987, got off to a rocky start with its Grip Shift system for road bikes. The company had planned to sell 100,000 units its first year, but only managed to sell 800.

Recently, the company notched a victory at the Giro de Italia as Alberto Contador, riding for Team Astana, won on SRAM Red—a clear signal of how far the company has come since its early, uncertain days in Chicago. That win gives it a boost in Europe where enthusiasts carefully note what equipment riders and teams use.

SRAM also has pursued a multi-brand strategy over the years with its purchase of RockShox, Avid, TruVativ and, more recently, Zipp wheels. The company also has a line of lubes, cleaners and brushes under the
brand name Pit Stop.

It’s a strategy that has firmly set it apart from Shimano, particularly SRAM’s purchase of RockShox—with forks and rear shocks usually being the most expensive components on a mountain bike. SRAM, over the years, also has worked closely with OE product managers who largely decide what gets spec’d on a bike. That strategy has paid long-term dividends.

But as industry consultant Bill Fields notes, SRAM is about one-fifth the size of Shimano, which posted bicycle revenue in 2007 of more than a billion dollars. “SRAM has a long way to go, but it’s fair to say that the industry has welcomed the competition SRAM has brought to that arena,” he said.

via Bicycle Retailer