Transaction boosts Dorel’s bicycle revenues to more than US$ 1 billion

EXCHANGES
TSX: DII.B, DII.A

MONTREAL, Aug. 22, 2013 /PRNewswire/ – Dorel Industries Inc. (TSX: DII.A, DII.B) today announced it is
acquiring a 70% interest in Caloi, a major Brazilian manufacturer
of bicycles and bicycle equipment. Established in 1898 in Brazil, Caloi
is one of the oldest and most established bicycle brands in the world.
It is the largest bicycle brand in Latin America and is the leader in
the Brazilian market. The purchase price was a high single digit
multiple of Caloi’s EBITDA. Sales in 2012 were close to R$273.5
million, a 22% increase over the previous year. The Company has an
estimated market share in Brazil of more than 40%. The transaction is
expected to be immediately accretive to Dorel’s earnings.

Caloi’s portfolio encompasses a full range of bicycles, from
high-performance to children’s models, including mountain bikes, urban,
recreational and road bikes. Caloi’s products are distributed across
the country through a variety of channels, from mass market to
independent bicycle dealers.

Caloi employs 900 people at its various locations, including its head
office in São Paulo, the Technology and Logistics Center in Atibaia and
its manufacturing facility in Manaus, which is the largest bicycle
manufacturing plant outside Southeast Asia, producing more than 700,000
units per year.

Brazil will become a production hub for Dorel. Caloi’s factory in Manaus
will assemble bikes for the company’s brands, such as Cannondale,
Schwinn, Mongoose and GT to serve the Brazilian and export markets.

“This new partnership with Caloi positions Dorel as one of the largest
bicycle companies in the world, as well as a leader of the Americas,”
commented Dorel President & CEO, Martin Schwartz. “We have built this
segment into a billion dollar business in just nine years and see
tremendous growth ahead. We remain focused on maximizing this sector so
that we may continue to enhance shareholder value. We are delighted to
welcome the Caloi team to Dorel. Eduardo Musa, current Caloi CEO will
become the bicycle segment’s Brazil President and will join its global
management team.”

Mr. Schwartz added that Dorel has been doing business in Brazil since
2009 when it established a new juvenile products division there. “We
have developed a strong juvenile product operation in Brazil and the
business has been growing this year. Despite current economic
challenges in the country which we are well aware of, we believe the
consumer market is good and is headed in the right direction. We see
this transaction as a solid opportunity.”

“Dorel has been steadily growing its global reach over the past four
years in key growth markets such as China, Eastern Europe and now
Brazil,” said Robert Baird, CEO and Group President, Cannondale Sports
Unlimited. “The addition of Caloi to our already strong portfolio of
brands and global presence will help us achieve our goal of seeing our
brands in every household, creating inspired experiences and improving
the health and wellness for consumers around the world.

“Caloi’s strong management team, its large distribution base and local
production capabilities will accelerate the development of Dorel’s
bicycle brands in Brazil and benefit Brazilian consumers who will be
able to access Dorel’s strong international brands. The Caloi brand
will also benefit from our technologies and expertise in building high
performance cycling products,” added Baird.

Caloi’s Eduardo Musa celebrates the new partnership as “the conclusion
of several years of work to transform Brazil as a real player in the
worldwide bicycle industry. The Caloi/Dorel partnership will strongly
benefit the Brazilian bicycle market. The expansion of Dorel’s bicycle
brands in our market will help meet the increasing demands of the
Brazilian consumer for high quality, matched with innovation and
style.”

Caloi is supporting the leading Brazilian athletes in their preparation
for the Olympic Games to be held in Rio de Janeiro in 2016. Its
mountain bike team – the Caloi Elite Team – is the only UCI registered
mountain bike team in Brazil.

Profile
Dorel Industries Inc. (TSX: DII.B, DII.A) is a world class juvenile products and bicycle
company. Dorel creates style and excitement in equal measure to safety,
quality and value. The Company’s lifestyle leadership position is
pronounced in both its Juvenile and Bicycle categories with an array of
trend-setting products. Dorel’s powerfully branded products include
Safety 1^st, Quinny, Cosco, Maxi-Cosi and B b Confort in Juvenile, as well as
Cannondale, Schwinn, GT, Mongoose, IronHorse and SUGOI in
Recreational/Leisure. Dorel’s Home Furnishings segment markets a wide
assortment of both domestically produced and imported furniture
products, principally within North America. Dorel has annual sales of
US$2.5 billion and employs 5,400 people in facilities located in
twenty-four countries worldwide.

Caution Regarding Forward Looking Statements
Certain statements included in this press release may constitute
“forward-looking statements” within the meaning of applicable Canadian
securities legislation. Except as may be required by Canadian
securities laws, Dorel does not undertake any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Forward-looking statements, by
their very nature, are subject to numerous risks and uncertainties and
are based on several assumptions which give rise to the possibility
that actual results could differ materially from Dorel’s expectations
expressed in or implied by such forward-looking statements and that the
objectives, plans, strategic priorities and business outlook may not be
achieved. As a result, Dorel cannot guarantee that any forward-looking
statement will materialize. Forward-looking statements are provided in
this press release for the purpose of giving information about
Management’s current expectations and plans and allowing investors and
others to get a better understanding of Dorel’s operating environment.
However, readers are cautioned that it may not be appropriate to use
such forward-looking statements for any other purpose.

Forward-looking statements made in this press release are based on a
number of assumptions that Dorel believed were reasonable on the day it
made the forward-looking statements. Factors that could cause actual
results to differ materially from the Company’s expectations expressed
in or implied by the forward-looking statements include: general
economic conditions; changes in product costs and supply channel;
foreign currency fluctuations; customer and credit risk including the
concentration of revenues with few customers; costs associated with
product liability; changes in income tax legislation or the
interpretation or application of those rules; the continued ability to
develop products and support brand names; changes in the regulatory
environment; continued access to capital resources and the related
costs of borrowing; changes in assumptions in the valuation of goodwill
and other intangible assets and subject to dividends being declared by
the Board of Directors, there can be no certainty that Dorel’s Dividend
Policy will be maintained.These and other risk factors that could cause
actual results to differ materially from expectations expressed in or
implied by the forward-looking statements are discussed in Dorel’s
annual MD&A and Annual Information Form filed with the applicable
Canadian securities regulatory authorities. The risk factors outlined
in the previously mentioned documents are specifically incorporated
herein by reference.

Dorel cautions readers that the risks described above are not the only
ones that could impact it. Additional risks and uncertainties not
currently known to Dorel or that Dorel currently deems to be immaterial
may also have a material adverse effect on our business, financial
condition or results of operations. Given these risks and
uncertainties, investors should not place undue reliance on
forward-looking statements as a prediction of actual results.

Except as otherwise indicated, forward-looking statements do not reflect
the potential impact of any non-recurring or other unusual items or of
any dispositions, mergers, acquisitions, other business combinations or
other transactions that may be announced or that may occur after the
date hereof. The financial impact of these transactions and
non-recurring and other unusual items can be complex and depends on the
facts particular to each of them. Dorel therefore cannot describe the
expected impact in a meaningful way or in the same way Dorel presents
known risks affecting the business.

SOURCE Dorel Industries Inc.