Dorel acquires Cannondale Bicycle Corporation - Two distinct bicycle divisions to be created



    EXCHANGES  TSX: DII.B, DII.A
    
          - High performance bicycles known worldwide
          - Transaction reinforces Dorel's focus on core businesses
          - Purchase is immediately accretive to earnings
    
    MONTREAL, Feb. 4 /CNW Telbec/ - Dorel Industries Ltd. (TSX: DII.A,
DII.B;) today announced it has acquired the Cannondale Bicycle Corporation, a
leading designer, developer and manufacturer of high-end bicycles.
Headquartered in Bethel, Connecticut, Cannondale has facilities in Bedford,
Pennsylvania as well as offices in Canada, Switzerland, Holland, Japan, and
Australia. Widely regarded as the bike industry's leading innovator,
Cannondale's handcrafted bicycles have won numerous design awards and are sold
in over 70 countries. The purchase also includes Sugoi Performance Apparel.
Sugoi products are used worldwide by runners, cyclists, triathletes and
fitness enthusiasts who demand the best apparel available.
    The total value of the all-cash transaction will be US$190 to
US$200 million, subject to Cannondale's earnings results for the year ending
June 30, 2008. The transaction, which will be immediately accretive to Dorel's
earnings, is being financed through debt. Cannondale and Sugoi are being
purchased from an affiliate of Pegasus Capital Advisors, which acquired the
company in 2003. 2007 sales for Cannondale and Sugoi were approximately $200
million.

    A clear strategy for the IBD category

    Dorel President and CEO, Martin Schwartz stated that in light of the
acquisition the Company's Recreational/Leisure segment is being split into two
distinct operating divisions. A new Dorel Independent Bicycle Dealers (IBD)
division, the Cannondale Sports Group, is being created and will focus
exclusively on this category with premium-oriented brands. Backed by Dorel's
extensive resources, the Cannondale Sports Group will build on Cannondale's
strengths to grow significantly within the IBD channel. "Our intention is to
build a world-class company that dealers will want to buy from," said
Mr. Schwartz. Pacific Cycle will become a stand-alone division with an
exclusive focus on mass merchant customers.
    "The Cannondale purchase is consistent with Dorel's plan to concentrate
on its core businesses. Since buying Pacific Cycle in 2004 we have learned a
great deal about the bicycle industry and have found it to be a true value
driver for Dorel. We are committed to pursuing this sector, and this important
transaction will position us globally in a most material way. Dorel recognizes
the importance and potential of the Independent Bicycle Dealer channel and is
purchasing Cannondale as the first step to become the world's number one IBD
player. Cannondale will be the crown jewel of this new Dorel division, which
will seek additional such growth opportunities."
    Note: Please refer to the separate release issued today "Dorel Creates
Two Distinct Bicycle Divisions Following Cannondale Acquisition".
    "We're excited about the future for Cannondale and our retailers.
Cannondale's goal is to be the number one supplier to the IBD channel. Dorel's
vast resources and experience provide us with long term stability and the
ability to accelerate our goals for growth with our retailers," stated Matt
Mannelly, President and CEO of Cannondale.

    A history of innovation, a record of wins

    Cannondale has come a long way since its establishment in 1971, when it
introduced the cycling industry's first bicycle trailer. The company grew
quickly, adding cycling apparel and accessory lines while earning a strong
reputation for innovation and quality. Cannondale raised the cycling world's
eyebrows by equipping its bicycles with handcrafted aluminum frames that were
both lighter and more flex-resistant than the steel models that dominated the
industry at the time.
    Many of the ideas that keep Cannondale products on the cutting edge come
from the sponsored athletes on the Company's professional racing teams.
Cannondale has an outstanding heritage in competitive cycling and has
consistently been on the leading edge of sports marketing. Cannondale bikes
have been powered to multiple stage wins in the Tour De France and have won
4 overall Giro d'Italia titles alongside countless World Cup Wins and World
Championship titles off road. Today Cannondale continues to push the envelope
in bicycle innovation and material expertise and is the bike of choice for the
Liquigas Pro Cycling Team, Cannondale Vredestein professional mountain bike
team, along with mountain bike legend Tinker Juarez and a host of other world
class professional cyclists and triathletes.
    Mr. Schwartz stated that Dorel's Recreational/Leisure segment has an
enormous opportunity to capitalize on the changing mindsets and trends around
the world. "Increasingly, people are actively engaged in seeking healthier
lifestyles; are concerned about the environment, and want to do something
about it; and desire sustainability at all levels. We sincerely believe our
products can help meet these objectives. This transaction underlines our plan
to further unlock value within the Company, concentrating on the
Recreational/Leisure and Juvenile segments which provide the greatest
potential."

    Conference Call

    Dorel Industries Inc. will hold a conference call to discuss the
Cannondale acquisition today at 10:30 A.M. Eastern Time. Interested parties
can join the call by dialling 1-800-732-9307. The conference call can also be
accessed via live webcast at www.newswire.ca or www.q1234.com. If you are
unable to call in at this time, you may access a tape recording of the meeting
by calling 1-877-289-8525 and entering the passcode 21261172# on your phone.
This tape recording will be available on Monday, February 4, 2008 as of
12:30 P.M. until 11:59 P.M. on Monday, February 11, 2008.

    Media

    Media interested in interviewing Dorel senior management today should
contact Rick Leckner at 514-731-0000. Photo opportunities will also be
available.

    Profile

    Dorel Industries (TSX: DII.B, DII.A) is a global consumer products
company engaged in the designing, manufacturing and marketing of a diverse
portfolio of powerful consumer brands, sold through its Juvenile,
Recreational/Leisure and Home Furnishings segments. Headquartered in Montreal
and with significant operations in the United States and Europe, Dorel employs
approximately 4,700 people in 15 countries. Annual sales are US$1.8 billion
and are made in over 60 countries worldwide.
    US operations include Dorel Juvenile Group, which markets the Cosco and
Safety 1st brands as well as Eddie Bauer and Disney Baby licensed products;
Pacific Cycle, which markets several brands including Schwinn, Mongoose, GT,
InSTEP, Playsafe and Roadmaster; and Ameriwood Industries, which markets
ready-to-assemble furniture products under the Ameriwood, Carina, SystemBuild,
Altra Furniture and Ridgewood brands; Cosco Home & Office, which markets
home/office products under the Cosco brand and Samsonite license as well as
home healthcare products under the Cosco Ability Essentials and Adepta brands.
In Canada, Dorel operates Dorel Distribution Canada, Ridgewood Industries and
Dorel Home Products. Dorel Europe markets juvenile products throughout Europe,
under the Bébé Confort, Maxi-Cosi, Quinny, Safety 1st, Babidéal, Mon Bébé and
Baby Relax brands. Dorel Asia sources and imports home furnishings products.
Dorel is the majority owner of In Good Care (IGC), a manufacturer and
distributor of juvenile products in Australia, whose two principal brands are
Bertini and Mother's Choice. Dorel also has eight offices in China,
headquartered in Shanghai, which oversee the sourcing, engineering and
logistics of the Company's Asian supplier chain.

    Cannondale profile

    Founded in 1971, Cannondale is a global designer, developer and
manufacturer of high performance bicycles apparel and accessories. With a
strong reputation for continuous innovation and quality the company is
headquartered in Bethel, Connecticut, USA with offices in Canada, Holland,
Japan, Switzerland, Australia, and a manufacturing facility in Bedford,
Pennsylvania.

    About Pegasus Capital Advisors

    Pegasus Capital Advisors, L.P. is a private equity fund manager that
provides creative capital solutions to middle market companies across a wide
variety of industries. Established in 1995, Pegasus manages over $1.8 billion
in assets through several private equity funds and has made close to
70 investments since its inception. It is currently pursuing initiatives in
several key sectors, including renewable and conventional energy, all-natural
human and pet foods, alternative building materials, LED lighting, homeland
security, niche consumer products and business services, as well as
investments associated with sustainable business solutions for companies in
other industries. The firm employs over 50 investment and advisory
professionals working out of main offices in Cos Cob, CT and New York City.
Caution Concerning Forward-Looking Statements

    Except for historical information provided herein, this press release may
contain information and statements of a forward-looking nature concerning the
future performance of Dorel Industries Inc. These statements are based on
suppositions and uncertainties as well as on management's best possible
evaluation of future events. The business of the Company and these
forward-looking statements are subject to a number of risks and uncertainties
that could cause actual results to differ from expected results. Important
factors which could cause such differences may include, without excluding
other considerations, increases in raw material costs, particularly for key
input factors such as particle board and resins; increases in ocean freight
container costs; failure of new products to meet demand expectations; changes
to the Company's effective income tax rate as a result of changes in the
anticipated geographic mix of revenues; the impact of price pressures exerted
by competitors, and settlements for product liability cases which exceed the
Company's insurance coverage limits. A description of the above mentioned
items and certain additional risk factors are discussed in the Company's
Annual MD&A and Annual Information Form, filed with the securities regulatory
authorities in Canada and the U.S. The risk factors outlined in the previously
mentioned documents are specifically incorporated herein by reference. The
Company's business, financial condition, or operating results could be
materially adversely affected if any of these risks and uncertainties were to
materialize. Given these risks and uncertainties, investors should not place
undue reliance on forward-looking statements as a prediction of actual
results.




For further information:

For further information: MaisonBrison, Rick Leckner, (514) 731-0000;
Dorel Industries Inc., Jeffrey Schwartz, (514) 934-3034

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