MILWAUKEE — Harley-Davidson will take its electric motorcycle division public through a blank-check company, valuing the enterprise that has been part of the Harley for 10 years at $1.77 billion.
Harley-Davidson shares gained 14% on Monday after the announcement.
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 U.S. next year.
LiveWire, which has been a part of Milwaukee’s motorcycle manufacturer for over ten years, became an entirely separate entity in 2019.
Jochen Timez, Harley-Davidson’s Chairman and CEO, will remain in the same position at LiveWire up to two more years following the close of the deal.
LiveWire’s stock is expected to list on the New York Stock Exchange under the ticker symbol “LVW.”
SPACs are special purpose acquisition corporations. They can be used to accelerate the public listing process, bypassing traditional initial public offerings that can take too long and cost-intensive.
SPACs have seen a surge in popularity in the last year. They reached a peak in 2021, when they raised an average $6 billion per week. Investors have a chance to invest in high-growth, exciting companies.
Companies going the SPAC route often feel more license to highlight projections for big growth they’re expecting in the future, for example. Traditional IPOs limit the company’s ability to highlight its past performance. This is not always the best selling point for startups with little or no sales and profits.
Harley-Davidson will retain approximately 74% of LiveWire’s equity after the transaction is closed. ABIC’s shareholders will own about 17%, and ABIC’s founders and Taiwanese powersports company KYMCO will own approximately 4% each.
The boards of Harley-Davidson & ABIC approved the deal. It is anticipated that the sale will close within the first half next year if shareholders give their approval.
Harley-Davidson, Inc. shares rose by $5.20 to $42.01 in early trading, but have fallen more than 3 percent over the last year.