EBR Sale Scheduled

[Scott]

https://www.facebook.com/ErikBuellRacing?fref=nf

See it weird stuff like this that makes things complicated. EBR is closed but whomever used to be their official Facebook persona either never got the memo or is in the know about something. I truly hope there is reason for optimism because the ride in the morning was a BLAST!!!

I think all the arm-chair doom and gloomers aren't recognizing basic facts and math - a couple years ago, a much less established EBR was valued by Hero at approximately $50 million. Since that time, EBR has made huge strides and by any reasonable estimation should have gained value - let's say they're worth $75 million now. If a $75 million company can be obtained for $20 million, people will be interested. And articles like that posted on the facebook page just emphasize the competence of the bikes and value of the company.

If I had the cash (at least $100 million to not only pay off the debts, but keep the lights on until the company is truly up and running) I would consider it a sound investment - as long as the bidding doesn't go too high. And I actually think that will be the story when the dust settles - there will be several interested parties and the bidding will go well over the $20 million required to cover the debt.

[Scott]

Yea, EBR's Facebook guy sure seems VERY hopeful. Let's hope his hope is justified.

Meanwhile, I was trying to see if I could find anything on line indicating restrictions on who can bid in a Chapter 128 filing, and I ran across this document:

http://www.cfa-llc.com/downloads/Cha...visors_LLC.pdf

It's a basically an advertisement for a guy who serves as a receiver, but it gives details of the steps involved in a Chapter 128 filing and gives one example of a company that went through the process and was kept open. The original employees were even guaranteed jobs for at least one year.

All we can do is speculate, but I suspect the reason EBR didn't continue operations through the sale has to do with the battle between Erik and Hero. I don't know the details, but I suspect the shut-down had to do with conflicts between the two parties and, by necessity, for whatever underlying reasons, they needed to shut down and go to this extreme to make a clean break.

[Hughlysses]

Another very interesting tidbit today; an EBR dealer on Badweb reported that they received their first communication from EBR since the closure:

Hello to all EBR dealers.
Our apologies for the last months and all the uncertainty and business hardship that the closure of EBR created.
The receiver and his team have worked diligently for a way forward and we are now confident all is headed in the right direction. It is likely that EBR will be under official new ownership as of July 23rd.

That sounds pretty damn positive to me!

[Scott]

Another very interesting tidbit today; an EBR dealer on Badweb reported that they received their first communication from EBR since the closure:



That sounds pretty damn positive to me!

[Scott]

It will be interesting to see where gamblers put their money over the coming weeks. A well funded company taking over and promising to fully support current dealers, owners and warranties (the result I believe we're all hoping for) vs. the company truly being done should make a huge difference in the price of bikes currently on showroom floors.

Will buyers be encouraged by EBR's apparent optimism and snap up bikes that are offered at fire sale prices with the hope that they can get a $17,000 bike for much less than that? Will dealers take the chance on raising the price of their existing inventory (and possibly be left holding the bag if things do go badly)? Will dealers drop the prices to encourage gambling buyers to make the jump (and lock in a loss, but potentially mitigate a larger loss)?

Or will both dealers and buyers just sit tight, wait it out, and not risk anything one way or the other until things are more certain?

I really hope this works out for dealers like AF1 who have put so much into this and deserve to be rewarded. And I hope 5 years from now AF1 is raking in money selling EBR's like crazy and making all this just a distant story of 'remember when?'.

[Bagger]

hmm, Gary Gray

With fellow American performance brand Erik Buell Racing (EBR), in financial upheaval, did Polaris consider a buy-out? “Not really,” Says Gray. “We need to build our own motorcycles, and that's more of a priority for us. Buell has done some really cool stuff over the years and I am sure Erik Buell is working hard to get EBR back up and running again.”

(http://www.motorcycle.in.th/article.php/The-Future-of-Victory-Motorcycles)

[Hughlysses]

^ Very interesting. That seems to put Polaris out of the running as a potential buyer.

[Scott]

Bummer. I was hoping they'd be in it.

[Hughlysses]

Over on Badweb, several people pointed out that Polaris is pretty stretched out already, between Victory, Indian, and recently-acquired Brammo (electric bikes). They also apparently built some huge multi-milllion dollar state-of-the-art painting facility recently just to support Indian.

I'd guess EBR became available too late to fit into Polaris's long-term plans. They keep saying they plan to build more Victory performance oriented bikes, so those are probably under development and EBR's bikes might not mesh well with that lineup.

I'm wild-a** guessing that leaves BRP/Rotax, Harley Davidson, and at least one buyer we never thought about in the bidding.

[Scott]

Over on Badweb, several people pointed out that Polaris is pretty stretched out already, between Victory, Indian, and recently-acquired Brammo (electric bikes). They also apparently built some huge multi-milllion dollar state-of-the-art painting facility recently just to support Indian.

I'd guess EBR became available too late to fit into Polaris's long-term plans. They keep saying they plan to build more Victory performance oriented bikes, so those are probably under development and EBR's bikes might not mesh well with that lineup.

I'm wild-a** guessing that leaves BRP/Rotax, Harley Davidson, and at least one buyer we never thought about in the bidding.

I wouldn't be surprised if at least one Japanese brand might be interested. For example, Yamaha has their 'Star' brand that attempts to market itself with an 'American' image. Mightn't Yamaha (or another Japanese company) be interested in owning a true American brand?

One interesting thing I noticed when I was in Europe is that in the German or Italian magazines, the Japanese motorcycles often use English in their ads. So you'll be reading through a magazine that's all in German, but when you get to the Suzuki ad it's either entirely or partly in English.

I think someone like Yamaha would recognize the value of being able to sell an American bike in Europe, Australia, Asia. . . and of course the US.

I would personally prefer a company like Polaris because then it truly would be an all-American company, but I suspect some foreign companies might recognize a greater value as an addition to their offerings.

Here's an idea: What if Honda is interested, in part, just to stick it to Hero?

I could also imagine a non-motorcycle company being interested. Honda and BMW both have cars and motorcycles, and Audi bought Ducati (for 1.2 BILLION which makes 20 million seem like peanuts), so I could imagine someone like Ford or any other number of auto manufacturers having an interest buying EBR and adding some 'edginess' to their brand.

And who knows, there could just be someone with a lot of money who would be interested in owning EBR as a very cool "hobby". It wouldn't be that different from owning a sports team, would it? And it would be a bargain compared to most sports teams. I know if I was stinking rich, I would consider something like that a really cool opportunity to get involved in something very fun and very cool. I don't know how much cash someone like Jay Leno has, but I could certainly imagine him having the interest if he had $100 million tucked away to play with. And if he doesn't have or doesn't want to risk that much cash, he has rich friends who he might be able to talk into joining him in such a venture.

Motorcycles have an allure. That's why we're all here. There are a lot of filthy rich individuals and companies out there and I can imagine a number of them at least being interested enough to put in a bid if they think they can get it at a low enough price.