SRAM Corp. has chosen a road less traveled to give back to its customer base and its new minority investor, Lehman Brothers Merchant Banking, is going along for the ride.
On Aug. 7, Lehman Brothers Merchant Banking and SRAM announced a Lehman investment in the bicycle parts manufacturer, with a twist. Lehman Brothers not only is making an investment in the firm, but also is helping fund the $10 million SRAM Cycling Advocacy Fund, which will make grants to support advocacy on policy issues affecting cycling infrastructure and the bicycle industry. The SRAM Cycling Advocacy Fund will be independent of SRAM and Lehman Brothers. The fund will be capitalized when the deal is closed, which is expected in September, said Brian Benzer, director of corporate development at SRAM. Funding will be in the same proportion as the final ownership of SRAM Corp. when the deal closes. SRAM executives will retain 60% ownership of the company and contribute 60% of the $10 million out of the proceeds of the Lehman investment; Lehman Brothers Merchant Banking will be contributing the rest.
We thought it important that we give something back to the industry we've grown up and thrived in, Mr. Benzer said.
SRAM executives hatched the idea and Lehman Brothers executives agreed to help fund it. Sources close to the deal noted that it's the first time Lehman Brothers Merchant Banking has helped to finance an advocacy fund as part of an investment.
We don't remember doing anything like that before, acknowledged Randall Whitestone, Lehman Brothers Merchant Banking spokesman. Arleen Jacobius