Harley-Davidson, the iconic American motorcycle brand, is to spin off and list its all-electric division LiveWire through a blank-cheque merger with the SPAC AEA-Bridges Impact Corp. Electric vehicles start-ups and companies have been a popular target for SPAC vehicles, which raise money from investors and list on a stock exchange before striking a deal with a company to take over that listing via a reverse merger.
It is reported that the deal between AEA-Bridges Impact Corp and Harley-Davidson values LiveWire at $1.77 billion and will see the SPAC invest $400 million in the electric bikes company. Harley-Davidson will also invest $100 million in the new company, which will be listed on the New York Stock Exchange. And another $100 million will be contributed to LiveWire’s coffers by Taiwanese motorcycle manufacturer Kymco through private investment in public equity (PIPE).
There has recently been a boom in investor demand for stocks in the vehicle electrification sector. LiveWire has the advantage of being relatively unique in the sense that most other start-ups in the space develop cars, vans, trucks and public transport vehicles rather than motorcycles.
Parent company Harley-Davidson has been recently struggling for growth as its main customer base ages and younger generations show less interest in motorcycling. LiveWire was launched earlier in 2021 in an attempt to tap into the interest of younger customers in all-electric motorcycles.
Harley-Davidson is arguably the world’s most well-known motorcycle brand, famous for its chopper-style bikes popular with the iconic motorcycle club the Hells Angels. Based in Milwaukee, Wisconsin, Harley-Davidson employs around 5000 staff and is worth $5.93 billion.
Harley-Davidson chief executive and chairman Jochen Zeitz will also serve as acting chief executive and chairman of LiveWire for up to two years after the deal has been completed and until the spin-off puts its own top executives in place. He commented yesterday:
“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.”
“This transaction will give LiveWire the freedom to fund new product development and accelerate its go-to-market model.”
After yesterday’s announcement, the share price of the AEA-Bridges Impact SPAC gained 3.6%, or 35 cents, to close at $10.20 on the New York Stock Exchange with investors approving the deal by buying into the investment vehicle.