Indian motorcycles sold

Lightcycle said:

Never saw one on the road...

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I rode one. It was a decent bike, but that motor? It didn't belong in a sporting bike. It just plain felt unhappy being hurried. It was never going to get many Sportster riders moving over.

Compared to my Tuono at the time, which in a sense was a similar bike, it was chips and cheese... the Tuono liked to be caned.

Indian, on the other hand, is a different subject: to me they are the kiss of death, much like MV Agusta. It's not that the brand isn't exciting and interesting, it's the the brand is overpriced and under-delivers, and has for a long time.

adri said:

I don't know if bankruptcy is in the immediate future. Isn't the plan with these venture cap types to drop R&D, and then squeeze every last drop of profit out of it they can before turning it over to some next brand to buy it and kick start the "revitalization" ?

Currently going through it as an Olympus camera owner... I think the company got bought up buy a ******* sushi company... The difference between my Olympus E-M5 III (launched 6+ years ago), and the current OM-5 Mark II (launched last month) is like, 3 updated features, switching from micro-usb to usb-c (slow charge only) and they made the menus prettier. That's it. Totally just coasting off of the established brand and bringing nothing new to the table

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Private equity has a reputation of plunder and abandon. Maybe there's some good ones out there but we don't hear about them.

A vintage book collector I knew had a hate on for people that bought valuable old books for $200 and cut out twenty illustrations, selling them for $30 each, making a $400 profit while destroying a historic piece of literature.

IMO private equity is based on people wanting to live off their investments instead of working and innovating. In many cases it works because there are businesses out there that are worth more parted out than kept running. A shoemaker could want to keep on making shoes because it's in his blood. When PE steps in and gives him a bunch of retirement money he takes it. PE has no interest in anything except making money.

The reputation is used to sell offshore products as deluxe. Machinery and properties are sold off. The brand and copyrights licensed. Pension funds are pillaged.

Living off an investment in perpetuity isn't easy if it's a fixed principal. First throw several percent of any gain back into the principal pot to maintain the original buying power. Set aside a cut for taxes on dividends. I can't see it working on single percent interest numbers unless you have double digit millions in the principal.

A senior can survive on less by bleeding down the principal and dying broke over 10 to 20 years. Younger investors have to be cutthroat to last 40 to 50 years. Freedom 55 is a curse on the economy.

nobbie48 said:

Private equity has a reputation of plunder and abandon. Maybe there's some good ones out there but we don't hear about them.

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Texas Pacific Group, a private equity firm, bought Ducati from an ailing Cagiva in 1996.

They took the company public in 1999, eventually selling it back to an Italian investment firm in 2005, who in turn sold it to Audi in 2012.

During Texas Pacific Group's ownership, Ducati continued developing and selling motorcycles like the Multistrada and the SportClassic, as well as winning World Superbike Championships with bikes like the 996 and the 999.

Not all private equity firms are plunder and abandon.

Lightcycle said:

Texas Pacific Group, a private equity firm, bought Ducati from an ailing Cagiva in 1996.

They took the company public in 1999, eventually selling it back to an Italian investment firm in 2005, who in turn sold it to Audi in 2012.

During Texas Pacific Group's ownership, Ducati continued developing and selling motorcycles like the Multistrada and the SportClassic, as well as winning World Superbike Championships with bikes like the 996 and the 999.

Not all private equity firms are plunder and abandon.

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Warren Buffet bought an ailing company that was about to go under. He realized they were overstaffed and carried too much parts inventory.

He let go a sizeable number of workers and stopped buying parts until levels dropped to reasonable numbers. The company survived but he was bad mouthed about the layoffs and the parts suppliers unhappily had to tighten their belts as well.

It was ignored that if it wasn't for his actions every employee would be out the door and the parts suppliers permanently affected.

The Ducati story is a good example of getting it right but even there, the motorcycle industry seems to have more marriages and divorces than Hollywood celebrities.

nobbie48 said:

A senior can survive on less by bleeding down the principal and dying broke over 10 to 20 years. Younger investors have to be cutthroat to last 40 to 50 years.

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You spelt "choose" wrong

Just a bit more info about the sale:

Indian revenue is small potatoes to Polaris, accounting for only 7% of its total business. Polaris still retains a minority stake in Indian after the sale.

Private equity group is Carolwood LP. In its history, Carolwood has never sold a company that they acquired.

Carolwood appointed new Indian CEO Mike Kennedy, former CEO of Vance & Hines and 28 years at Harley-Davidson. Seems a strange move to hire this level of talent if their intent was to part out Indian.

All of this sounds like Polaris has taken Indian as far as it could or was willing to, without throwing more resources at it and/or losing focus on their core business. The new owners don't sound like plunder and abandon to me. Seems like they are trying to take the business to the next level, and Polaris is willing to ride their coat tails in the form of a minority stake.

Just my take on it.

I agree. Private equity generally seek investments that have potential. Either require investment to grow, better management, or operational tuneups - often all 3.

Parting out companies requires the sum of the parts be worth more than the purchase price. I doubt that’s the case with Indian. Adding a new experienced guy suggests operational tuneups and additional investments.

With HD in a woolly position, there may be a chink in the armour that the new Indian can exploit, particularly ripe are attracting younger riders.

Maybe a trump can help with a tarrif on on Japanese cruisers