Harley Davidson (Pigs) – Harley-Davidson, Inc. Get the report Bikes are known to be loud and fast, but supply chain issues are forcing the company to calm down for the next two weeks.
The Milwaukee-based company has announced that it will suspend assembly and shipments of all vehicles except its electric vehicle line Liveware.
Harley-Davidson said it received information from a third-party supplier as late as March 17 regarding a regulatory compliance issue regarding supplier component parts.
The agency said it was taking steps beyond the precautionary measure and that it was “committed to finding a solution and resolving this situation urgently.”
When contacted, Harley-Davidson said it had no additional information.
The move could complicate the company’s recovery – it was on track to return to a year-to-date high-closing share price of $ 42.01 in February.
In the last three months, the stock has fallen more than 20%.
The future of liveware
Late last year, Harley-Davidson announced that it was splitting its electric-bike division to merge with a special acquisition company and take it publicly.
Joachim Zitz, chief executive of Harley-Davidson, said in a statement at the time, “This transaction will give Liveware the freedom to finance new product development and accelerate its go-to-market model.”
“Liveware will benefit from its at-scale production and distribution capabilities to its strategic partners as well as be able to operate as a fast and innovative public company.”
The deal will be funded by AEA-Bridges’ $ 400 million cash trust and $ 100 million each from Harley-Davidson and Taiwanese motorcycle maker Kymco.
Upon completion, Harley will hold 74% equity shares in the new company where ABIC will hold 17% of shareholders and AEA-Bridge founder and Kymco 4%.
Scroll to continue
Liveware will become the first publicly traded EV motorcycle company in the United States
The division was previously seen as an integral part of Milwaukee’s 2021-2025 strategic plan to achieve long-term profitable growth.
Jitz will be chairman of Liveware for two years after the deal closes.
The combined company is expected to have an enterprise value of about $ 1.77 billion and a post-money equity value of about $ 2.31 billion when it closes.
SPACs, or blank-check companies, are formed to find and integrate an operating partner.
The idea is to give the operating company momentum in the public market and avoid the extended process of a traditional initial public offer.
Harley-Davidson may have a bright future
In April, Morningstar analyst Jaime Katz assigned Harley a wide trench but with a negative trend.
He puts a fair price of $ 42, compared to a recent quote of around $ 39.
“The Covid-19 gives Harley the opportunity to reset its long-term strategy and focus its efforts on its core consumer, which we believe holds the key to high profit margins,” Katz wrote in a February statement.
“With the launch of The Hardware Strategy, [Chief Executive] Joachim Jitz is pursuing the highest return-on-investment opportunity for Harley. “
But there are some caveats, he said.
“There’s no switching cost to protect Harley’s brand when consumers replace their bikes, and Hurley’s premium price orders compared to its peers have proved problematic during cyclical recessions and competitive pricing periods,” he said.