Garmin Buys Tacx for Eu170m

Source: garmin.com

A little bird has told me that Garmin just bought TACX for 170m Euros.

TACX are a privately held dutch firm that are best known for their indoor bike trainers, although they also make tools and accessories, as well as indoor training software and applications.

The acquisition is announced today as one of Garmin’s affiliates has acquired all the outstanding shares of Tacx Onroerend en Roerend Goed B.V (“Tacx”). The transaction will likely be completed in Q2.2019.

It will be interesting to see what Garmin do with the TACX trainer products which currently include: TACX FLOW (Budget – I have one somewhere), Tacx Bushido ($600+), the Tacx Flux and high-end TACX NEO – the latter being widely recognised as one of the best trainers. I have a Wahoo KICKR 2017 .

Talking of Wahoo, they must be somewhat intrigued by this. On the one had they don’t want Garmin as a competitor in too many spheres yet, on the other hand, Garmin might drive up the prices of the TACX products if, or when, they re-brand them.

Althought don’t forget that the ‘gym/class’ market is a big one, perhaps even bigger than the triathlete/cyclist market (ie the market that most readers of this will be familiar with). TACX could be Garmin’s move into a whole new ballgame.

Distribution & Manufacture could also be interesting. The TACX trainers are made in the EU and so currently could have a cost advantage when selling domestically; as imported products will probably incur notable import duties.That makes them less likely to be as cost competitive when importing into the USA, which must be the largest single market.

Apparently, Wahoo make their KICKR trainers in Vietnam & elsewhere (see comments below) and that that situation has helped them so far financially.

However Garmin also have the potential to shift manufacturing of TACX to the Far East, OK that won’t affect the cost of importing into the USA and could adversely effect EU pricing *BUT* there is the potential to lower the costs of production by eventually shifting manufacturing facilities to ASIA. No doubt statements will be issued to assure workers at TACX and, indeed, it is difficult to close some businesses down in relatively protected business environments like the Netherlands. But money talks.

Thus with Garmin’s vast R&D fund behind them, potentially cheaper longterm costs of production and then the strength of a very solid distribution network to retail outlets, Garmin is going to create a mini Tsunami.

Stock market reaction was positive. If you look more closely at the movement it seems plausible that news of this escaped before the official announcement. Or that could be movements in line with the market

 

More detail

Here is more detail from dcr who is closer to Garmin than me. His angle on Zwift is less obvious but important.

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Barrie Day
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Barrie Day

That’s something else for Garmin to break!

Brian
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Brian

I thought Wahoo switched manufacturing to Vietnam.