Harley-Davidson’s Electric Division Going Public in 2022

Harley-Davidson's new electric motorcycle, LiveWire, is shown in this handout photo released by Harley-Davidson. (Harley-Davidson Motor Company/Handout via Reuters)

Harley-Davidson’s electric bike division is going public through merging with a special acquisition company (SPAC) in a deal valued at approximately $1.77 billion, the iconic global motorcycle brand announced on Monday.

The transaction will net the division, Livewire, which has been operating independently since 2019, with proceeds of around $545 million that the company plans on investing in product development and improving on its manufacturing and distribution capabilities.

“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,” said Jochen Zeitz, chairman, president, and CEO of Harley-Davidson.

According to the deal, AEA-Bridges Impact Corp. (ABIC), a blank-check firm formed by two private equity executives, John Garcia and Michele Giddens, will merge with Livewire and take it public next year, listing it on the New York Stock Exchange with the expected ticker symbol “LVW.”

Zeitz will hold the top post at least for two years after the deal closes. Regarding Livewire as a stand-alone brand, Zeitz said on CNBC, “Every crisis is an opportunity, I really saw a huge opportunity, especially in the time when people were locked down at home who just wanted to get out and ride; and we see a great surge in new riders coming into the sport.”

He added that Livewire, while focusing on new market segments with “different expectations” in technology and “feel and look,” will “spearhead” the development toward transforming Harley-Davidson into an electric bike brand.

Harley-Davidson’s share prices have been on a steady decline since a peak of $51.96 in May 2021. The latest news has given the stock price a slight jolt, with share prices jumping 14 percent at Monday’s opening. The price has since settled down but is trading higher than on Friday.

There’s a third partner in the Harley deal—Taiwan-based Kymco, a motorcycle manufacturer with presence in over 100 countries. “The transaction will be financed by 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),” stated a press release.

When the deal closes in the first half of 2022, Harley-Davidson will retain an equity share of 74 percent in the company, ABIC shareholders will own around 17 percent while the SPAC founders and KYMCO will own four percent each.

SPAC mergers are financial mechanisms deployed by companies to raise investor capital and go public, bypassing the lengthy traditional IPO process. SPACs are based on future outlooks, which are convenient for startups that do not have much sales or profits to show.