Halfords has acquired two UK eCommerce businesses specialising in bikes and accessories for £18.4 million.

Tredz is an online retailer of premium bikes and cycling parts, accessories and clothing, while Wheelies is a provider of bicycle replacement for insurance companies. Both generated revenues of around £32 million for the year ending 29 February 2016, up from £24 million the previous year, with an EBITDA of £2.4 million.

Keith and Michael Jones sold the two brands – which employ around 250 people in South Wales – to Halfords for £18.4 million. Depending on the financial performance of Tredz over the following year, there will be deferred consideration payable in 12 months.

The businesses will continue to trade on a standalone basis and will be led by Keith Jones and the existing management teams.

Halfords CEO, Jill McDonald, said: "We are delighted with this acquisition, which we believe is a strong and complementary addition to the group, extending our presence in the online market for premium bikes, parts, accessories and clothing. We continue to believe in the long-term growth potential of the cycling market. Keith and his management team have done a fantastic job of building a successful online retail operation and we look forward to working with them to develop and grow the businesses further."

Keith Jones, group managing director of Tredz and Wheelies, added: "We are very proud of the businesses that we’ve grown from a small shop twenty seven years ago into a strong operator in the premium cycling market, with a team of over 250 people. However, the time has come for us to work with a partner on the next phase of growth. Halfords is exactly what we were looking for. With the support and resources of a large group, we look forward to building upon what we have achieved so far to drive long-term growth."

Reflecting on the deal, Bhavesh Unadkat, a management consultant in retail customer engagement design at systems integrator and consultancy group Capgemini, told Essential Retail that the move enhances Halfords' premium brand offering online, adding that historically the premium bike brands "have not always favoured" Halfords as a customer.

"Halfords claims that it has around 20-25% of the UK’s £2 billion bike sector, however its growth from online sales is not as strong as market growth and especially poor in premium brands – this merger should no doubt help this," Unadkat added.

"It was recently announced that Wiggle and Chain Reaction would merge to strengthen their space in the online cycling market, which may have also been a key driver for the Halfords acquisition."

Unadkat said it is a positive move for Keith Jones to continue as managing director of Wheelies and Tredz, post acquisition.

"If he can continue to grow the businesses organically and utilise Halfords' systems, warehousing and any other back office operations or logistics economies of scale, then it could make the acquired brands more profitable," he noted.

"It will also provide Halfords with a big presence on the online premium brand sector to further grow their overall dominance in the biking market."

It has been a year of significant change at Halfords, with CIO Anna Barsby recently announcing her decision to leave the business to take up a chief technology director role at the supermarket group, Morrisons. In addition, last summer saw Halfords launch an online marketplace, partnering with 30 approved companies to expand its range of bike and car accessories online.

The retailer believes owning a marketplace will allow it to anticipate and react to trends and consumer buying behaviour, while testing the market with new brands in real time.