MILWAUKEE, July 11 /PRNewswire/ --
- Italian Company Known for Premium,
High-Performance Motorcycles
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 (US$109
million), which includes the satisfaction of existing bank debt for
approximately 45 million euros (US$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.
Web site: http://www.harley-davidson.com
