Polaris Industries has given new life to a start-up company with the full acquisition of Brammo Inc. The buyout is great news for the Brammo, which has been struggling to gain any traction as an electric bike maker amidst a segment that seems to be growing in competition as the years pass. Without the funding it needed to compete against the big boys, Brammo found itself in the unenviable position of fending for itself without any financial stability to stand on.

But with Polaris Industries coming into the picture, Brammo will not only live to see another day, but it will have a lot of weight lifted off its shoulders. Instead of building these bikes from the ground-up, Brammo will now be able to focus exclusively on developing and integrating electric vehicle powertrains, leaving the job of bringing these products to market to Polaris, which is in a much better position to do it and more importantly, get the job done.

Part of the buyout includes Polaris’ takeover of Brammo’s production facility in Spirit Lake, Iowa, which it will reportedly use to produce the electric motorcycles beginning in the second half of 2015. The buyout is also a significant step up in the relationship of the two companies that began in 2011 when Polaris invested $28 million in the company.

Now that Polaris has essentially absorbed a significant part of Brammo’s business framework, the two companies can proceed with developing new electric bikes that will fall under the Polaris brand name.

Click past the jump to read more about Polaris Industries’ purchase of Brammo Inc.

Why it matters

While Brammo would probably prefer to be successful on its own, it just didn’t have a sustainable business model that allowed it to succeed. That’s the harsh reality facing a lot of these start-up companies and Brammo couldn’t find a way to be an exception to it. Getting absorbed by Polaris Industries was the best thing that could’ve happened to the company. Not only does it have the financial stability provided by Polaris, but it was also bought by a company it already has a relationship with.

That’s always an underrated factor about these buy-outs because of the numerous advantages familiarity has between two previous partners that have essentially merged into one. This kind of business transaction hasn’t always succeeded - Mission Motors is probably nodding its head slowly - but it still puts Brammo in a far better position than what it had when it was just trying to stay afloat.

The current arrangement now involves Brammo focusing its full attention on becoming an electric powertrain provider with Polaris taking the job of building the actual bikes and developing them to market off its hands.

It’s a good arrangement that might give Brammo the lease on life it needed. In doing so, the company just might stick around for the long haul as a hub for EV research and development.

Press Release

Polaris Industries Inc. (NYSE: PII) today announced it has acquired the electric motorcycle business of Brammo Inc. In addition, Polaris is acting as a leading investor in a recapitalization of Brammo that enables the company to focus exclusively on the design, development and integration of electric vehicle powertrains.

Going forward, the two companies will leverage Polaris’ leading position in the global powersports industry to market a variety of electric vehicles utilizing Brammo’s award winning lithium-ion electric drivetrain technology, while freeing Brammo to continue developing its innovative electric vehicle powertrains. Brammo supplies these products, including the Brammo Power™ battery pack and Brammo Power™ vehicle management systems, globally to a wide range of OEMs. As part of this transaction, Polaris will utilize the assets acquired to begin manufacturing electric motorcycles in the second half of 2015 at its Spirit Lake, IA facility.

“We have enjoyed our involvement with Brammo Motorcycles over the past three years, and our excitement about their industry-leading lithium-ion electric drivetrain technology has increased commensurate with their improvements in cost and performance. Polaris and Brammo share a goal of adding the most advanced and highest capability electric solutions to Polaris’ portfolio of leading powersports products,” said Scott Wine, Polaris Chairman and CEO. The agreement allows both companies to be more agile during the development cycle with clear accountability toward selling products that exemplify Polaris’ standard for delivering world class vehicles.

Polaris has been a strategic investor and partner with Brammo since 2011. During that time, the companies have collaborated on a number of projects in motorcycles, off-road and on-road vehicles. “Today’s announcement strengthens not only Polaris’ commitment to bringing our consumers lithium-ion electric solutions, but also this partnership’s ability to continue innovating and developing leading electric drivetrain technology,” said Wine. “We anticipate a return on these investments and believe the new alignment brings us that much closer to delivering world-class electric solutions across our products.”

Brammo has designed and developed numerous electric vehicles, including the award-winning Enertia and Empulse motorcycles. Testifying to its capabilities and technology, Brammo motorcycles have won a number of awards including: 2013 Playboy “Motorcycle of Year” and “Best Electric” (Empulse R), 2012 GQ “Best Stuff of the Year” (Empulse), 2011 Popular Science “Best of What’s New” (Empulse), 2011 Motorcycle.com “Best of 2011” and a 2010 Silver Edison Award. In addition, Brammo’s motorcycles have won numerous racing championships including the 2013 FIM eRR North American World Cup Champion and 2012 TTXGP World Championship.

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