Wahoo eliminates all debt following “significant” support from investors

Wahoo has eliminated all of its debt following what the American company has described as “significant” equity support from current and new investors, bringing a potential end to a troubling period for the brand, which saw its credit rating downgraded by leading agencies and 15 percent of its workforce let go.

Announcing the investment yesterday, Wahoo’s founder Chip Hawkins says it has “successfully recapitalised” the business through a confidential arrangement with investors who have experience in fitness and athletic endurance platforms, and that the new support will expand the company’s global role in advancing innovation in the smart fitness and training category.

“The successful recapitalisation of the business provides the flexibility we were seeking as a management team to allow for investment in innovation and growth from the company’s substantial base and category leadership position, by diversifying the breadth of its offerings to better support athletes and fitness enthusiasts,” Hawkins said in a statement.

“Wahoo’s management team is energised by a renewed focus on delighting its customers and continuing Wahoo’s mission of building a better athlete in all of us.”

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The positive announcement for Wahoo comes just a month after leading credit rating agency Moody’s downgraded the brand’s credit rating when it delayed debt service payments at the end of March.

Another of the ‘Big Three’ credit rating agencies, S&P Global Ratings, which had previously downgraded the Atlanta, Georgia-based company’s rating in September 2022 and January 2023, also lowered Wahoo’s rating from CCC- to D in April, and warned that the cycling computer and indoor training brand was in danger of liquidation due to its “unsustainable” finances.

In response to those credit downgrades, Wahoo – which let 15 percent of its workforce go last December – told road.cc that the company had made “a special agreement to delay our scheduled interest and principal payment with our lenders for our long term note and revolving credit facility”.

It continued: “The credit agencies define a default as any missed interest or principal payment, regardless of any prearranged agreement. We are actively collaborating and moving forward positively with the support of our lenders and our private equity partner Rhone to create a new capital structure that meets the long-term needs of the business.”

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In the wake of this week’s confirmation that the company has received the necessary investment to remove its debt, Wahoo’s CEO Mike Saturnia said: “The investment from both new and existing investors is a clear sign of confidence in the strength of Wahoo, specifically our team, brand, strategy, and powerful ecosystem of innovative products, software, and services.

“This could not have happened without months of hard work and support from our channel partners. We want to thank our supply chain and retail and distribution partners for their trust and confidence as we navigated to a successful conclusion to this process.”