Italian Company Known for Premium, High-Performance Motorcycles
MILWAUKEE, July 11 /PRNewswire-FirstCall/ -- Harley-Davidson, Inc.
(NYSE: HOG) today announced the signing of a definitive agreement to
purchase the Italian motorcycle maker MV Agusta Group (MVAG). Under the
agreement, Harley-Davidson will acquire 100 percent of MV Agusta Group
shares for total consideration of approximately 70 million euros ($109
million), which includes the satisfaction of existing bank debt for
approximately 45 million euros ($70 million). In addition, the agreement
provides for a contingent payment to Claudio Castiglioni in 2016, if
certain financial targets are met. MV Agusta Group is privately held, with
the Castiglioni family owning 95 percent of MVAG shares.
The acquisition is expected to close in several weeks, pending the
satisfaction of contingencies and receipt of regulatory approvals.
Harley-Davidson intends to fund the transaction primarily through
euro-denominated debt.
MV Agusta Group has two families of motorcycles: a line of exclusive,
premium, high-performance sport motorcycles sold under the MV Agusta brand;
and a line of lightweight motorcycles sold under the Cagiva brand. MV
Agusta's F4-R motorcycle, powered by a 1078cc in-line four-cylinder liquid
cooled engine, is rated at 190 hp. The company sells its products through
about 500 dealers worldwide, the vast majority of them in Europe. In 2007,
MVAG shipped 5,819 motorcycles. During 2008 MVAG has significantly slowed
production due to financial difficulties.
"Motorcycles are the heart, soul and passion of Harley-Davidson, Buell
and MV Agusta," said Harley-Davidson, Inc. Chief Executive Officer Jim
Ziemer. "Both have great products and close connections with incredibly
devoted customers. The MV Agusta and Cagiva brands are well-known and
highly regarded in Europe. They are synonymous with beautiful, premium,
Italian performance motorcycles," Ziemer said.
Harley-Davidson, Inc. plans to continue to operate MV Agusta Group from
its headquarters based in Varese, Italy. Following closing, the first
priority will be to appoint a leadership team to include a new Managing
Director and to resume the manufacture of current models.
Current MV Agusta Group Chairman Claudio Castiglioni will continue in a
leadership role as Chairman and will play a major role in future product
development. Design Chief Massimo Tamburini will continue his leadership of
MV Agusta Group's world leading sport-bike design studio.
"We take enormous pride in MV Agusta and Cagiva motorcycles," said
Castiglioni. "Our riders seek an uncompromising experience in premium
performance motorcycles. And with Harley-Davidson's deep understanding of
the emotional as well as the business side of motorcycling, I have great
confidence that our motorcycles will excite customers for generations to
come."
According to Ziemer, the acquisition is intended primarily to expand
Harley-Davidson, Inc's presence and footprint in Europe, complementing the
Harley-Davidson and Buell motorcycle families. Retail sales of
Harley-Davidson motorcycles have grown at a double-digit rate in Europe in
each of the last three years, as the Company has increased its strategic
focus on global markets.
"The acquisition of MV Agusta Group will enhance Harley-Davidson, Inc's
position as a global leader in fulfilling customer dreams and providing
extraordinary customer experiences. We look forward to a long relationship
with the MV Agusta and Cagiva families of customers and employees," said
Ziemer.
Conference Call
Harley-Davidson, Inc. will hold a webcast conference call regarding the
acquisition from 8:00 to 8:30 a.m. (central time) today, July 11, with Tom
Bergmann, Executive Vice President and Chief Financial Officer,
Harley-Davidson, Inc. To access the webcast, please log on and register at
least ten minutes prior to the start time at
http://www.harley-davidson.com, under the Investor Relations section. A
replay of the webcast will be available at the same location approximately
two hours after the call concludes.
Company Background
Harley-Davidson, Inc. is the parent company for the group of companies
doing business as Harley-Davidson Motor Company (HDMC), Buell Motorcycle
Company (Buell) and Harley-Davidson Financial Services (HDFS).
Harley-Davidson Motor Company produces heavyweight motorcycles and offers a
line of motorcycle parts, accessories, general merchandise and related
services. HDMC manufactures five families of motorcycles: Touring, Dyna(R),
Softail (R), Sportster (R) and VRSC(TM). Buell produces premium sport
performance motorcycles and offers a line of motorcycle parts, accessories,
and apparel. HDFS provides wholesale and retail financing and insurance
programs primarily to Harley-Davidson and Buell dealers and customers.
Forward-Looking Statements
Harley-Davidson, Inc. intends that certain matters discussed in this
release are "forward-looking statements" intended to qualify for the safe
harbor from liability established by the Private Securities Litigation
Reform Act of 1995. These forward-looking statements can generally be
identified as such because the context of the statement will include words
such as Harley "believes," "anticipates," "expects," "plans," or
"estimates" or words of similar meaning. Similarly, statements that
describe future plans, objectives, outlooks, targets, guidance or goals are
also forward-looking statements. Such forward-looking statements are
subject to certain risks and uncertainties that could cause actual results
to differ materially from those anticipated as of the date of this release.
Certain risks and uncertainties are described below. Shareholders,
potential investors, and other readers are urged to consider these factors
in evaluating the forward-looking statements and cautioned not to place
undue reliance on such forward-looking statements. The forward-looking
statements included in this release are only made as of the date of this
release, and Harley-Davidson, Inc. disclaims any obligation to publicly
update such forward-looking statements to reflect subsequent events or
circumstances.
Although Harley-Davidson and MV Agusta Group have signed a definitive
purchase agreement, there is no assurance that all of the contingencies
will be satisfied or that the governmental approvals will be obtained in a
timely manner or at all. The proposed acquisition may not occur if the
conditions to completing the transaction are not satisfied in a timely
manner.
In addition, Harley-Davidson intends to finance a portion of the
consideration by borrowing funds and its level of indebtedness may increase
as a result, which may cause Harley-Davidson to incur additional interest
expense and limit Harley-Davidson's ability to obtain additional financing.
It could also increase Harley-Davidson's exposure to general adverse
economic and industry conditions and adversely impact Harley-Davidson,
Inc.'s earnings per share. Furthermore, Harley-Davidson may have challenges
successfully integrating or profitably operating the business of MV Agusta
Group.
SOURCE Harley-Davidson, Inc.
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Related links:
http://www.harley-davidson.com
CONTACT:
Financial, Amy Giuffre, +1-414-343-8002, or
Media, Bob Klein, +1-414-343-4433, both of Harley-Davidson, Inc.
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