Folding bike maker Brompton in talks over £20m stake sale - report

Folding bike maker Brompton Bicycle is reportedly in talks to sell a £20m stake months after disclosing a sharp fall in profits.

According to Sky News, the company has asked shareholders to approve an investment worth nearly £20m from the BGF, the high street bank-backed fund.

Insiders told Sky that if the investment is agreed, it would value the company on a pre-money basis at about £180m.

Brompton has been hit by increased supply chain and manufacturing costs over the last 18 months. In its latest results filed at Companies House, the company said pre-tax profits had slipped to £7.3m, with margins nearly halving during the year ended 31 March 2022.

Sky said it was unclear how the valuation implied by the new capital-raising compared with prior valuations of the company.

The BGF has invested in hundreds of smaller and medium-sized UK companies since it was established in 2011. It was established in the aftermath of the banking crisis as a way for lenders including Barclays and Lloyds Banking Group to rebuild their reputations.

One source told Sky that the deal between the BGF and Brompton was "not certain" to be approved by Brompton's eclectic register of shareholders.