Harley Goes Public With Electric Motorcycle Company Via SPAC | Economic news


MILWAUKEE (AP) – Harley-Davidson will go public with its electric motorcycle division through a blank check company, valuing the company that has been part of Harley for 10 years at $ 1.77 billion.

The news rocked longtime Harley-Davidson shares, which jumped 12% ahead of the opening bell on Monday.

Under the agreement, the special purpose acquisition company AEA-Bridges Impact Corp. will buy Harley-Davidson’s LiveWire and make it the first publicly traded electric motorcycle company in the United States next year.

LiveWire has been part of the motorcycle maker Milwaukee for 10 years and became a separate unit in 2019.

Harley-Davidson CEO Jochen Zeitz will hold the same roles at LiveWire for up to two years after the deal closes.

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LiveWire’s shares are expected to trade on the New York Stock Exchange under the symbol “LVW”.

Special Purpose Acquisition Companies, or SPACs, are used as a shortcut to going public, bypassing the long and expensive process of a traditional initial public offering.

PSPCs exploded in popularity last year, peaking in early 2021, when they averaged $ 6 billion per week. They provide a way for investors to get into these exciting and potentially high growth businesses, firms or industries, and few industries are as hot lately as electric vehicle manufacturers.

Companies that take the PSPC route often feel more empowered to highlight the high growth projections they expect in the future, for example. In a traditional IPO, the company is limited to highlighting its past performance, which isn’t necessarily the best selling point for young startups with little to gain in sales or profits.

Following the transaction, Harley-Davidson will retain an approximate 74% stake in LiveWire. ABIC’s shareholders will own around 17%, and the founders of ABIC and Taiwanese powersports company KYMCO will hold around 4% each.

The deal has been approved by the boards of directors of Harley-Davidson and ABIC and if it obtains the approval of ABIC shareholders, it is expected to be concluded in the first half of next year.

Harley-Davidson, Inc. shares jumped $ 4.25 to $ 41.06 in pre-market trading, but are down more than 3% in the past year.

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