VANCOUVER, WA — The deal that Nautilus Inc. and Fit Dragon International completed last month has ties to a company Nautilus attempted to purchase three years ago.
An affiliate of Fit Dragon International, Xiamen World Gear Sports Goods Co. Ltd., or World Gear, completed the purchase of certain assets of Nautilus' commercial business for $10.9 million. World Gear is also known as Land America Health and Fitness Co., a manufacturing plant based in Xiamen, China.
Nautilus had planned to purchase Land America in 2007. However, after Sherborne Investors took control of the Nautilus board in 2008, it terminated the $63 million purchase of Land America. Gregg Hammann had lauded the proposed purchase as Nautilus' CEO in 2007. Hammann is now the CEO of Power Plate International, but he declined Club Industry's request to discuss matters concerning Nautilus.
In the terms of the recent deal, Nautilus received $7.9 million at closing time, will receive $2 million within 60 days and another $1 million over the next three years. The Vancouver, WA-based company retains certain rights to the Schwinn brand and will continue to market Schwinn fitness products in the consumer channel.
Nautilus also announced last month that a federal income tax refund of approximately $12.1 million, which it previously expected to receive by March 31, was expected to be received before the end of last month.
“With the sale of these commercial assets and our anticipated federal tax refund, we enter 2010 with a much improved balance sheet and as a more focused and healthier company,” Nautilus CEO Edward Bramson said in a statement.
Fit Dragon, which few in the industry had heard of when the sale was announced in December, has operations in Asia, North America and Europe, with approximately 3,000 employees.
A company statement said Nautilus' Schwinn and StairMaster brands will be marketed through Fit Dragon affiliate Core Fitness LLC. The company will do business as StairMaster, according to a company spokesperson.