NEW YORK, NY – JUNE 23: Harley-Davidson riders unveil Project LiveWire, the world’s first electric vehicle … [+] Harley-Davidson motorcycle on a special ride across the iconic Manhattan Bridge on June 23, 2014 in New York City. (Photo by Neilson Barnard / Getty Images for Harley Davidson)
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The quest to get U.S. motorcycle maker Harley-Davidson back on track took an unusual but not entirely unexpected turn on Monday with the reveal that the company’s new brand of electric motorcycles, LiveWire, will go public with a PSPC deal. in a close future. .
No specific date for a public offering has been given and the deal is subject to the approval of the shareholders of the SPAC company, but a press release said that LiveWire, which was recently created by Harley-Davidson as than its own brand, will be associated with sustainability. Specialized acquisition company AEA-Bridges Impact Corporation (aka ABIC) for listing as LVW on the New York Stock Exchange. ABIC is listed under the stock symbol IMPX.
Additionally, Taiwan-based KYMCO is also part of the deal. KYMCO manufactures a wide range of scooters, light motorcycles, ATVs and other motorized devices and sells them in countries all over the world, including in the USA, where they are best known for their scooters. KYMCO’s US headquarters are located in South Carolina.
According to the press release, “LiveWire’s funding will consist of $ 400 million in cash from ABIC held in trust, a $ 100 million investment from Harley-Davidson and a $ 100 million investment from KYMCO, via a PIPE (private investment in public capital). ” When public, “Harley-Davidson will retain an approximate 74% stake in the company, ABIC shareholders will own approximately 17%, and the founders of ABIC and KYMCO will each own approximately 4%.”
If closed, the deal could give LiveWire an “enterprise value of approximately $ 1.77 billion and net worth of approximately $ 2.3 billion at closing,” the statement said. press published Monday morning. Harley-Davidson had a market cap of $ 6 billion at midday Monday.
“Today’s announcement is a historic milestone with LiveWire on its way to becoming the first publicly traded electric motorcycle company in the United States. the electrification of sport, â€Harley-Davidson CEO Jochen Zeitz said in the press release. “This transaction will give LiveWire the freedom to fund new product development and accelerate its time-to-market model. LiveWire will be able to operate as an agile and innovative public enterprise while benefiting from the large-scale manufacturing and distribution capabilities of its strategic partners, Harley-Davidson and KYMCO. “
To analyse
We put a lot of emphasis on new CEO Jochen Zeitz, who was on Harley’s board of directors before becoming CEO in March 2020 – just at the start of the pandemic. Harley-Davidson suffered from consecutive quarters of falling profits, falling sales and losing market share. An aging but dedicated core demographics, expensive products that were viewed by many throughout the motorcycle community as high quality but technologically outdated, and a general decline in the number of people appearing interested in motorcycles – of any brand or name. type – had some people foresee a possible end of Harley-Davidson, or the loss of its independence in a possible sale.
More than 50 years ago, the iconic motorcycle maker found itself in the hands of leisure equipment maker AMF, where it almost went bankrupt before a last-minute takeover by company executives. The company reinvented and refined key parts of its motorcycles and the brand went public (HOG) in 1986. From there, continuous efforts at modernization and product refinement led Harley-Davidson to one of the most big comebacks in American business history, but the past few years haven’t been nice, despite HD making some of the excellent motorcycles this author has reviewed.
However, Zeitz, from Germany, had managed to bring sportswear maker Puma back from the brink before joining Harley’s board of directors, and it was hoped he could work some of the same magic on it. Milwaukee. After taking the reins, Zeitz continued former CEO Matt Levatich’s efforts to bring a controversial new motorcycle to fruition but at the right time earlier this year, and the Pan America adventure bike was a hit for the business (disclosure: I’m currently reviewing Pan America for Forbes.com).
This launch followed another controversial step for Harley under Levatich: the debut of the fully electric motorcycle LiveWire in 2019. Perhaps as a forerunner of the LiveWire plan, at the end of 2020, Harley-Davidson announced that its electric bikes newly announced would be created. as its own brand, Serial 1, a name taken from the first Harley motorcycle produced in 1903.
MORE FORBESHarley-Davidson “Serial 1” Details New Electric Bikes with Specifications, Prices, and a Nice SurpriseThrough Bill roberson
Harley-Davidson was the first (and perhaps the most unlikely) major bicycle maker to launch a full-size, full-horsepower electric motorcycle in the industry – and still is, as of this writing. . However, they have stiff competition from Zero Motors, which started as a manufacturer of clean leaf electric motorcycles over 15 years ago and produces a wide range of popular electric motorcycles, all of which are cheaper than the model. LiveWire, which is now known as LiveWire One under the LiveWire brand.
While going public with a SPAC is surprising, the inclusion of Taiwan-based scooter maker KYMCO in the deal may be more so – but it also makes sense. Although relatively unknown in the United States, KYMCO is a heavyweight outside of America, selling hundreds of thousands of machines – many of which are quite sophisticated – across Europe and Asia. The pairing with KYMCO gives LiveWire (and by extension Harley-Davidson) an easier entry into Eurasian markets with what can be a simple rebranding of KYMCO products as LiveWire machines, while also putting the huge ones KYMCO’s R&D and production capabilities for new products – especially all -electric machines – at your fingertips.
Electric scooters are already commonplace and are gaining popularity in many cities around the world. While breaking through with a full-size electric motorcycle is a tall order due to the much higher expectations of bikers, putting together competent scooters – especially electric models – is a much easier fruit to hang on to. The prices are much lower and buyers don’t expect supercar performance. Most of the time, they need their machines to be reliable, affordable and convenient in terms of transporting cyclists through major cities, where the electric charging infrastructure – or battery exchange technology – is already largely in place. With LiveWire essentially separated from the Harley-Davidson branding, the Motor Company could be in the mix in a massive global market for electric motorcycles and scooters far beyond what they could have hoped for in terms of their large. legacy gasoline-powered machines, which will continue to be popular in the United States
The LiveWire split had sparked discussions that Harley-Davidson would do the same with Pan America motorcycles, but they may tie into the mothership a bit more than the LiveWire and Serial 1 platforms. Harley-Davidson shares rose sharply in LiveWire news, but have since returned most of those gains.