Officials for Speedway-based Zipp Speed Weaponry announced Sept. 21 that they have signed a letter of intent to be acquired by Chicago-based SRAM Corp.
Both companies design and manufacture high-end bicycle components.
Financial terms of the deal, which is expected to close within 60 days, were not disclosed.
Zipp will maintain its headquarters on Main Street in Speedway, said company president Andy Ording. There will be no lay-offs at Zipp and the management staff, including Ording, who is also part of current ownership, will stay in place. Ording, 48, will report to SRAM CEO Stan Day.
The acquisition will give Zipp, which was founded in 1988, the resources to expand.
"Zipp has remained focused on market-defining technology development in advance composites and aerodynamics," Ording said. "After nearly two decades of carbon product manufacturing, the SRAM opportunity provides additional horsepower and improved global market leverage."
Zipp made a name for itself making carbon fiber wheels for triathletes. In 2000, Zipp wheels began gaining popularity with bicycle racers in Europe, where the high-end cycling market is much larger. Since 2000, riders in some of Europe's biggest professional races, including the Tour de France, have used Zipp wheels.
Industry experts said SRAM, which has more than 1,500 employees worldwide, will help Zipp grow through its expansive worldwide distribution network.
The acquisition, industry sources said, is vitally important for SRAM's strategic growth. SRAM already designs and makes road and mountain bike drivetrain components, suspension parts, brakes and road and mountain bike cranks, handlebars and seat posts.
Though Zipp, which has about 60 employees, makes several other bicycle components, industry sources said SRAM primarily sought Zipp's wheel line and expertise with carbon fiber. Zipp Wheels sell for about $1,300 a pair.
"Zipp is a great company and respected brand, with a strong management team, advanced technology and superb manufacturing capability," Day said in a statement.(