Harley’s ‘LiveWire’ Electric MotorcycleBrand To Go Public In SPAC Deal WithKYMCO


NEW YORK, NY-JUNE 23: Harley Davidson riders reveal Project LiveWire , the first electric Harley Davidson motorcycle during 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) GETTY IMAGES


Forbes / Bill Roberson

2021 12 13


The quest to get the once dominant American motorcycle maker Harley-Davidson back on track took an unusual but not altogether unexpected turn Monday with the revelation that the company’s new electric motorcycle brand,LiveWire, will go public with a SPAC deal i n the near future.


No specific date for a public offering was listed and the deal is subject to the SPAC

company shareholders approval, but a press release did say that LiveWire, which was spun off by Harley-Davidson as its own brand just recently, will partner with sustainability focused special purpose acquisition company AEA Bridges Impact Corporation (aka ABIC) for the listing as LVW on the New York Stock Exchange.

ABIC is listed under the stock symbol IMPX.


Additionally, KYMCO, based in Taiwan, is also part of the deal. KYMCO makes a

wide range of scooters, light motorcycles, ATVs and other motorized devices and

sells them in countries around the world, including in the U.S., where they are best

known for their scooters. KYMCO’s U.S. headquarters are in South Carolina.


According to the press release, “funding for LiveWire will consist of ABIC’s $400

million cash held in trust, a $100 million investment from Harley Davidson, and a

$100 million investment from KYMCO, through a PIPE (private investment in

public equity).” Once public, “Harley Davidson will retain an equity in terest in the

Company of approximately 74%, ABIC’s shareholders will own approximately 17%,

and ABIC’s founders and KYMCO will own approximately 4% each.”

If completed, the deal could give LiveWire an “enterprise value of approximately

$1.77 billion and po st money equity value of approximately $2.3 billion at closing,”

according to the press release issued Monday morning. Harley Davidson had a

market cap of $6 billion during mid day trading Monday.


“Today’s announcement is a historic milestone with LiveWire set to become

the first publicly traded EV motorcycle company in the U.S. By building on Harley

Davidson’s 118 year lineage, LiveWire’s mission is to be the most desirable

electric motorcycle brand in the world, leading the electrification of the sport,”

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

go to market model. LiveWire will be able to operate as an agile and innovative

public company while benefiting from the at scale manufacturing and distribution

capabilities of its strategic partners, Harley Davidson and KYMCO.”


Analysis

There has a been a lot of focus on newCEO Jochen Zeitz, who was on Harley’s

board before he transitioned to CEO in March of 2020 just as the pandemic

began. Harley Davidson was suffering through consecutive quarters of sliding

earnings, sales declines and loss of market share. An aging but dedicated central

demographic, expensive products that were seen by many in the larger motorcycle community as high in quality but technologically outdated and a general overall decline in the number of people seeming interested in motorcycle of any brand or type had some people forecasting a possible end of Harley Davidson, or the loss of its independenc e in a possible sale.

Over 50 years ago, the iconic motorcycle maker ended up in the hand of

recreational equipment maker AMF, where it foundered nearly into insolvency

before a last gasp buyback by company principals. The company reinvented and

refined ke y parts of their motorcycles and the brand went public (HOG) in 1986.

From there, continued modernization efforts and product refinement led Harley

Davidson to one of the greatest comebacks in American business history, but the

recent years have not been k ind, despite H D making excellent motorcycles this

author has reviewed.


However, Zeitz, who hails from Germany, had successfully brought sports apparel

maker Puma back from the brink before joining Harley’s board, and it was hoped

he could work some of th e same magic in Milwaukee. Upon taking the reins, Zeitz

followed through on former CEO Matt Levatich’s efforts to bring a controversial

but well timed new motorcycle to term earlier this year, and the Pan America adventure bike has been a breakout hit for the company (disclosure: I am currently

reviewing the Pan America for Forbes.com).

That launch followed another controversial step for Harley under Levati

ch: The debut of the LiveWire all electric motorcycle in 2019. Perhaps as a precursor to

the LiveWire plan, in late 2020, Harley Davidson announced that its newly

announced electric bicycles would be spun off as its own brand, Serial 1, a name

taken from t he first motorcycle Harley Produced in 1903.


Harley-Davidson was the first (and perhaps most unlikely) major legacy bike

maker to launch a full size, full powered electric motorcycle in the industry and

still is, as of this writing. However, they have s trong competition from Zero Motors,

who began as a clean sheet electric motorcycle maker over 15 years ago and

produces a wide range of well regarded electric motorcycles, all of which are less

expensive than the LiveWire model, which is now known as the L iveWire One

under the LiveWire brand


While taking LiveWire public with a SPAC is surprising, the inclusion of Taiwan

based scooter maker KYMCO in the deal is perhaps more so but it also makes

sense. While relatively unknown in the U.S., KYMCO is a jugg ernaut outside

America, selling hundreds of thousands of machines many of them quite

sophisticated-across Europe and Asia. Pairing with KYMCO gives LiveWire (and

by extension, Harley Davidson) an easier entry into Eurasian market places with

what may b e a simple rebrand of KYMCO products as LiveWire machines, while

also putting KYMCO’s massive R&D and production capabilities for new products

especially all electric machines within reach.


Electric scooters are already commonplace and are growing in popularity in many

cities worldwide. While breaking through with a full size electric motorcycle is a

tall order due to the much higher expectations of motorcycle riders, spooling up

competent scooters especially electric models is much lower hanging f ruit.

The prices are much lower and buyers aren’t expecting supercar levels of

performance. Mostly, they need their machines to be reliable, affordable and

practical in terms of transporting riders through large cities, where electrical

charging infrastruc ture or battery swapping technology is already largely in

place. With LiveWire essentially separated from Harley Davidson’s branding, the

Motor Company could be in the mix in a massive, worldwide electric motorcycle

and scooter marketplace far, far bey ond what they could have hoped for in terms

of their large, gas powered legacy machines, which will continue to be popular in

the U.S.


Spinning off LiveWire had sparked talk of Harley Davidson doing the same with

the Pan America motorcycles as well, but t hey perhaps cleave a bit more tightly

to the mothership than the LiveWire and Serial 1 platforms. Harley Davidson

shares spiked sharply on the LiveWire news but has since returned most of those

gains.