Polaris Acquires Brammo’s Electric Motorcycle Business
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.