*** Dorel buys Pacific Cycle firm for $310-million (U.S.) ***

Montreal, Canada (AP) -- 01/13/2003
Montreal-based Dorel Industries Ltd. says it is buying leading
bicycle firm Pacific Cycle for $310-million (U.S.), as the
consumer products company eyes the recreational business for growth.

Pacific Cycle has a 27 per cent market share of U.S. bicycle sales
and manufactures such brands as Schwinn, Mongoose, BMX and
GT bicycle brands.

“We intend to leverage Pacific's powerful brands to create a
platform for future growth in leisure and recreational products,
including natural extensions in our juvenile segment,”
Dorel CEO Martin Schwartz said in a statement Tuesday.

Wisconsin-based Pacific Cycle has annual sales of $325-million,
Dorel said. The acquisition is expected to add “at least” 50 cents
a share to Dorel's fiscal 2004 earnings and 25 cents a share related
to the company's average tax rate.

With a work force of 4,800, Dorel makes products ranging from
infant car seats and strollers to furniture. Its 2002 revenue was
$992-million.

Dorel says the U.S. bicycle industry has annual sales of $5.5-billion,
with new bicycles accounting for $2.5-billion. Pacific Cycle sells
about 5 million bicycles a year and Dorel says it sees “potential to
gain additional” market share.

“Pacific Cycle sells more bicycles than anyone else in the
U.S. bicycle industry and its portfolio of powerful brands
is one of the strongest in the sporting goods industry,”
Mr. Schwartz said.

“Its business model is very similar to ours and provides numerous
opportunities to significantly strengthen Dorel's position as a global
consumer products company.”

The Montreal firm says Pacific Cycle's operations resemble
Dorel's distribution channels and outsourcing, particularly in Asia.

“Both companies have developed high quality products through
domestic design, overseas sourcing and intensive marketing through
long-established retailer relationships.

Dorel is financing the acquisition, from private investment group
led by Wind Point Partners, through debt. Dorel has amended
its credit facilities.

"This acquisition, along with Dorel's existing businesses,
will generate sufficient cash flow to pay down debt,” he said.

Pacific Cycle's other products include Roadmaster, InStep, Pacific,
and Murray labels. Pacific Cycle will be run as a Dorel division and
its management will remain in place, the company said.

CC - The Associated Press (AP)

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