Bidders for StairMaster Ready, Cybex Sale Rumors Resurface

With StairMaster's auction on the calendar for Jan. 17, SNEWS has learned that a non-fitness company may try to shoulder out at least one major fitness companies to win StairMaster as an investment.
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With StairMaster's auction on the calendar for Jan. 17, SNEWS has learned that a non-fitness company may try to shoulder out at least one major fitness companies to win StairMaster as an investment.

The Reiss Companies, a privately held family business based in New Orleans, La., has been talking to StairMaster accounts, apparently as a part of the company's due diligence before the auction this week.

Insider sources have told SNEWS the same company may be checking out Precor, which was put on the market last month by its parent, Illinois Tool Works Inc. (NYSE: ITW). Click here for that story.

StairMaster broker Susanne Meline at Houlihan and Lokey, Howard and Zukin in Los Angeles said she was not able to discuss bidders or the process, other than to say the auction would be in a company attorney's office Thursday, and court approval of the selected bidder was scheduled for Jan. 25. In contrast to the free-for-all, tell-all auction of Schwinn, the StairMaster auction will be behind closed doors in Seattle, Wash. Click here for our story.

Companies that have been said to be interested in the StairMaster brand are Direct Focus, which acquired Schwinn Fitness in September, as well as Life Fitness. But fitness insiders say Direct Focus may end up being the leading and perhaps only contender, and that any bidder would be more interested in the name's value than the company's product.

"The name is extremely strong," said one fitness insider. " It is one of the few really recognized brands in fitness," aside from Nautilus.

Nautilus is also now owned by Direct Focus (NASDAQ: DFXI)

The Reiss Company operates mostly commercial companies, including real estate, and none in sporting goods or fitness. Its model, SNEWS was told, is to buy companies in an economic downturn, install a management team, turn around the company, then either continue to operate it, sell it to the management team, or sell it when the economy swings upward.

But StairMaster and Precor may not be the only brands in which Reiss is interested. Rumors have started to fly again that Cybex (AMEX: CYB) is for sale, despite Cybex announcing on Dec. 21 that it had finalized an agreement with its banks which, among other things, will extend the maturity date of the facility for another year, waive defaults, and amends other repayment terms.

Cybex spokespersons vehemently denied the sale rumor, pointing to several profitable quarters and adding that Cybex is "here to stay."

"Unequivocally, 100 percent, I can say that Cybex is not up for sale in any way, shape, or form," said Sean Carr, Cybex marketing manager. "We're definitely in a mode of transition from defense to offense."

Chairman and CEO John Aglialoro stated on Dec. 21 about the bank's agreement and the company: "This agreement demonstrates the recognition of Fleet and First Union Banks of the progress that has been made in 2001 and their confidence in the future of Cybex."

SNEWS View: As the (fitness) world turns -- Still a young industry, fitness will experience growing pains that include mergers and untimely deaths. If the StairMaster name doesn't go for a song-and-a-dance, that company may become a name in the history books. We expect Precor, a mostly healthy company, to be bought and to continue. And Cybex, which is busy turning out new product but loading itself with debt to do it, will need to sell a lot of product to complete its successful turnaround. Even nameless participants on Yahoo chat lists question that ability. So a sale -- perhaps one that involves alliances -- might be something that top executives there may be quietly considering.

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