Harley-Davidson has announced it is to go public with its spin-off LiveWire brand in order to raise investment in a deal that also involves Taiwanese motorcycling giants, Kymco.
Last year it was announced LiveWire - the name attributed to Harley-Davidson’s first all-electric roadster model - would be distanced from the American firm’s core cruiser model base by operating under its own banner.
To stimulate this shift, Harley-Davidson will put LiveWire public in a move that is set to net it $545m at a pro forma enterprise value of around $1.77bn. It is achieving this by merging with an SPAC - a ‘blank check’ company that allows it to sidestep the process of getting an IPO. It will be known LVW on the on the New York Stock Exchange.
Unusually, the deal involved a third party in the form of Kymco, a low capacity motorcycle and scooter specialist that holds a large market share in Asia and has been making in-roads in Europe with its modern and diverse range offerings.
It will stump up $100m in a deal that will see it become LiveWire’s ‘strategic partner’ by manufacturing and distributing future LiveWire models.
“LiveWire plans to redefine motorcycling as the industry-leading, all-electric motorcycle company, with a focus on the urban market and beyond.
“As a strong and desirable brand with growing global recognition, LiveWire plans to develop the technology of the future and to invest in the capabilities needed to lead the transformation of motorcycling.
“LiveWire will draw on its DNA as an agile disruptor from the lineage of Harley-Davidson, capitalizing on a decade of learnings in the EV sector and the iconic heritage of the most desirable motorcycle brand in the world.”
Vote of confidence from Harley-Davidson for LiveWire
While EV is a hot topic among manufacturers following confirmations the market will be required to make a full shift to electric in the next 10-15 years, the Harley-Davidson LiveWire remains relatively unique in a field of sparse offerings largely dominated by scooters.
Moreover, even before you consider the low take up of electric motorcycles at this time, the LiveWire - available since 2019 - was seen as a shock move by a firm with a reputation for big, heavy and relatively thirsty models.
Harley-Davidson has remained coy on the success of the LiveWire, but it’s telling that after a big promotional drive initially, a change of management at the Milwaukee firm since its launch has seen the model shuffled to the bottom of its priority list.
Indeed, with the model’s future in doubt after the new CEO Jochen Zeitz suggested he wants to take Harley back to its core business model, its was announced LiveWire would be spun off from Harley-Davidson to act as a spin-off brand instead, with its primary model becoming known as the LiveWire ONE.
While cynics suggested this was the firm distancing itself from the LiveWire before dropping it altogether, the decision to go public will be seen as a vote of confidence in drumming up investment to develop new models and fresh powertrains, beginning with an update to its Arrow power unit.
Even so, it is a risk. Going public has been a popular move for myriad start-up EV manufacturers, but only a handful have made a success of it, with others falling by the wayside entirely.
Still, Harley’s size and the connection with Kymco will bring investor confidence. The company is investing heavily in EV production, with its planned mid-size sportsbike - the RevoNEX - set to be manufactured in Italy as part of a plant to expand into western markets.
