Polaris to Sell Indian Motorcycle Majority Stake and Separate It into a Private Equity Owned Standalone Business Unit
There had been rumors (strong rumors), that Polaris Inc. had Indian Motorcycles up for sale for most of this year. The company has now announced that it is to "separate Indian Motorcycle from its portfolio and into a standalone business."
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| Unlike when the last three Indian Motorcycle sales took place, manufacturing will remain at its present facility this time - at Spirit Lake, Iowa. |
Polaris has entered into a definitive agreement to sell a majority stake in Indian Motorcycle to Carolwood LP, an independent private equity firm founded in 2014 and headquartered in Los Angeles, California. Indian Motorcycle contributed approximately $478m, or 7.0%, of Polaris' revenues for the trailing twelve-month period ended June 30, 2025.
Upon close, the transaction is expected to add to Polaris' annualized adjusted EBITDA by approximately $50m and to adjusted earnings per share ("EPS") by some $1.00. The close of the transaction is expected to occur in the first quarter of 2026, subject to the satisfaction or waiver of customary closing conditions.
The company statement went to state that "Polaris is confident in Indian Motorcycle's future success under Carolwood ownership and will maintain a small equity position in the Business after the transaction closes." Additional terms of the deal were not disclosed.
"Polaris and Indian Motorcycle both stand to benefit from this deal, which will enable each business to move faster, deliver industry-leading innovation, and lean further into our respective market strengths," said Polaris Chief Executive Officer Mike Speetzen.
"For Polaris, the sale will further strengthen our focus on the areas of our portfolio that offer the strongest growth potential and allow us to accelerate investments in key initiatives and create wins with customers and dealers. It will also unlock greater long-term value for Polaris and our shareholders, with immediate value creation that we expect will become increasingly meaningful over time."
Speetzen continued: "Under Polaris' ownership and investment, Indian Motorcycle has been re-established as a celebrated brand and major player in the global motorcycle market. With its current product portfolio, global dealer network, category expertise and manufacturing resources, the Business is well positioned to succeed as a standalone company with a dedicated focus on its industry."
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| Polaris' decision to sell Indian Motorcycle comes not long after the brand finally transitioned into profit. According to Polaris CEO Mike Speetzen, Indian Motorcycle achieved the Number One market share spot position in the United States for mid-size cruisers in 2024 - not exactly an over-populated market segment though! |
Speetzen went on to state that "we were highly intentional and selective in our search and planning efforts for Indian Motorcycle's next chapter of growth. In Carolwood, Indian Motorcycle has a partner that believes in building on the Business' current momentum and supporting its next stage of success. We are confident and committed to making this a seamless transition for Indian Motorcycle dealers, customers and employees."
For the new owners, Andrew Shanfield, a principal at Carolwood is quoted as stating that "Indian Motorcycle is an iconic brand built on American heritage, craftsmanship, and most importantly, a community of riders. We're honored to help usher in its next chapter as an independent company and to support its continued growth as a symbol of performance and pride. At Carolwood, we target iconic brands that we can passionately impact. Indian Motorcycle allows us to do just that."
Until the transaction closes, Polaris President of On Road and International Mike Dougherty will continue to lead the On Road and International businesses, including Indian Motorcycle, at Polaris. Over the next several months, he will help shepherd Indian Motorcycle in its transition to becoming a standalone company. Dougherty, with a distinguished nearly 28-year career with Polaris, has announced his intent to retire upon the closing of the transaction.
Speetzen commented: "During his tenure with Polaris, Mike's passion, tenacity and guidance has seen our international revenue grow from under $100m to over $1bn today, with a direct presence in more than fifteen countries. Indian Motorcycle achieved the No. 1 market share position in the United States for mid-size cruisers in 2024."
Commenting on preliminary Third Quarter results (due for release on October 28), Speetzen said "as we prepare to report our third quarter results, we're encouraged by improving retail trends with ORV ex-Youth up low double digits and continued strong share gains in ORV.
"Based on preliminary data, we expect third quarter sales to be at the high end of our previously issued guidance range of $1.6bn to $1.8bn. We anticipate third quarter adjusted EPS to be in the range of $0.31 to $0.41, which is meaningfully higher than our original expectations, driven by higher-than-expected shipments, strong cost management and ongoing progress within our operational efficiency initiatives."
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| Former H-D, V&H and RumbleOn/Ride Now executive Mike Kennedy will take over as Indian Motorcycle CEO when the deal completes in 2026. |
As a part of the deal, approximately 900 employees will transition as a part of the new Indian Motorcycle Company. Indian Motorcycle will retain the majority of its team, including engineers, designers and staff, along with manufacturing resources.
The manufacturing facilities in Spirit Lake, Iowa, and Monticello, Minn., as well as the industrial design and technology center in Burgdorf, Switzerland, will transition to the new standalone motorcycle company as a part of the deal.
Indian Motorcycle will continue to provide sales, service, and support for dealers and customers throughout this transition. After the sale is finalized, Indian Motorcycle will operate independently of Polaris and continue selling motorcycles and parts, garments and accessories (PG&A) and providing service through its global Indian Motorcycle dealer network.
Indian Motorcycle was by far the major slice of Polaris' On-Road segment and the position of the under-performing Slingshot 'reverse-trike' roadster in a re-calibrated, post-Indian Motorcycles operations landscape is now looking even less certain that it has done of late.
Within hours of the announcement Polaris' share price jumped on the news. However, there also were analyst opinions being aired suggesting that, at present, without something like this deal Polaris might be otherwise struggling to sustain the kind of levels of shareholder returns that would be critical mass for its capital requirements.
There were also suggestions that while this may be a short-term fix (at best) it could be one that sees Polaris exit a segment in which it is doing well at this time. One in which it has been judged to be in a position to continue to make profitable progress.
The change in ownership marks a return to gainful motorcycle industry employ for former 26-year Harley veteran, Vance & Hines President, and RumbleOn CEO Mike Kennedy as CEO of the newly independent Indian Motorcycle organization once the deal closes – bringing Kennedy into toe-to-toe competition with his 'alma mater'.
Kennedy is highly regarded as a motorcycle industry executive through and through, one with international experience and a broad market perspective. Some had even suggested he could have been a candidate for the Harley CEO vacancy, but this is a career move that brings only positive baggage.
Carolwood will be the fourth owner of Indian Motorcycle in the 26 years since Gilroy, California based Ray Sotelo, of South County Motorcycles fame/infamy used his subsequently 1995 founded California Motorcycle Company (CMC) - a custom motorcycle building business - as an established manufacturing operation to restart Indian branded production in 1999.
CMC was one of nine companies that reversed into Indian Motorcycle Company of America (IMCOA), a holding company in which rights to the dormant Indian Motorcycle brand name had been consolidated after 46 years of competing and ultimately fruitless ownerships.
All attempts to return the Indian name to sustainable production had failed after the original Springfield, Massachusetts Indian motorcycle factory (founded first as a bicycle brand by George Hendee in 1897) entered bankruptcy in 1953 after 52 years of continuous production.
Ultimately, Sotelo ran into difficulties, and his 'Gilroy Indian' operation was acquired by Stephen Julius of Chris Craft revival fame in 2006 - with production moved to King's Mountain, NC. In turn, Polaris Industries acquired the brand and all rights in 2011, moving production to Spirit Lake, Iowa - where the new owners will continue production under new CEO Mike Kennedy.
