Harley-Davidson takes LiveWire public via SPAC

Photo: LiveWire

Back in May, Harley-Davidson spun off its LiveWire electric motorcycle production into a new company, and left many wondering the motive behind the move. Now we know: Today, Harley-Davidson took the LiveWire division public through a SPAC deal.

(Wondering what a SPAC is? If you haven’t learned via Stock Markets with Bruce or similar YouTubers, find out more here).

To make this happen, LiveWire will merge with AEA-Bridges Impact Corp. (that’s the SPAC part of the deal). Supposedly, the plan sees LiveWire with a pro forma enterprise value of approximately $1.77 billion. It’s supposed to debut on the New York Stock Exchange on December 14 under the ticker LVW.

When that happens, Harley-Davidson says the “Transaction net proceeds of $545 million will fund LiveWire’s strategic plan to accelerate its go-to-market model, invest in new product development, and enhance global manufacturing & distribution capabilities.” Along with all that cash, Harley-Davidson also announced the new LiveWire company will partner with Kymco. Officially, the investors’ release says “LiveWire will benefit from industry-leading strategic partners – Harley-Davidson and KYMCO, a leading global powersports company headquartered in Taiwan – by leveraging their engineering expertise, manufacturing footprint, distribution, supply chain infrastructure and global logistics capabilities.

Wait—Does this mean Kymco will be manufacturing LiveWires? Or just producing parts, so Harley-Davidson can build them and put the LiveWire badge on them? What about all the Harley-Davidson investors who paid for LiveWire development?

The release is short on finer details, but does say this:

  • Upon closing of the transaction, Harley-Davidson will retain an equity interest in the Company of approximately 74%, ABIC’s shareholders will own approximately 17%, and ABIC’s founders and KYMCO will own approximately 4% each.
  • As the majority shareholder in LiveWire following the transaction, Harley-Davidson will continue to consolidate LiveWire’s results of operations for GAAP financial reporting purposes. LiveWire will be reported as a separate segment within Harley-Davidson’s financials with GAAP disclosures recognizing amounts attributable to the noncontrolling interests.

So, the MoCo maintains a big ownership chunk of LiveWire, and all those H-D investors should be getting their money’s worth.

The investors’ release also says “LiveWire will be the first public EV motorcycle company in the U.S. with its products designed and developed in America.” Um, that’s not a “made-in-America” promise. But does LiveWire’s iPhone-wielding, Prius-driving clientele even care?

We’ll see—there’s a lot to be seen, really. This is a massive move for Harley-Davidson, for the LiveWire company, and for electric motorcycles in general. Its results have far-reaching implications for motorcycling in general.



    • English translation:

      Step 1, Harley couldn’t sell the Livewire motorcycle, so it hived off a company called Livewire to distance it from the core brand.

      Step 2, Livewire can’t make money from the bike, even at the reduced price (sorry to the few suckers who paid $30k USD just to have an HD badge on it), so they are taking it public to make money from selling speculative shares. (As far as I understand, a SPAC bases its IPO share value on the future speculative value of a company and its product, not on current net worth and cash flow income). This provides a cash infusion and a further distancing from the core brand.

      Step 3, when Livewire the company eventually fails, HD will have sufficiently distanced itself, wrung out as much cash as possible, and can say to the electrical pundits, “we tried”.

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