#United States #Harley-Davidson #Milwaukee #KKR #PIMCO

Harley-Davidson's Exciting New Chapter with KKR and PIMCO's Strategic Partnership

On July 30, 2025, Harley-Davidson, Inc., a legendary name in the motorcycle industry, disclosed a significant strategic partnership with KKR and PIMCO, two prestigious financial firms. This collaboration is designed to revolutionize Harley-Davidson Financial Services (HDFS) into a more flexible and low-risk financing entity while simultaneously injecting approximately $1.25 billion in discretionary cash into the company. This financial boost aims to enhance operational capabilities and investment strategies considerably.

The Agreement's Financial Essence

A crucial aspect of this partnership involves HDFS selling a 4.9% equity interest to KKR and PIMCO, evaluated at about 1.75 times the post-transaction book value. Additionally, HDFS will be offloading over $5 billion worth of retail loan receivables, acknowledging the premium pricing of these assets. This strategic move not only monetizes its financial assets but also supports HDFS's goal to operate efficiently in the long run.

The partnership dictates that HDFS will sell approximately two-thirds of the retail loans it originates over a minimum of five years, ensuring a steady and predictable revenue stream. Despite these changes, Harley-Davidson will maintain control over HDFS, which assures customers and dealers of continued service for existing and new loans.

Transforming Financial Services

The collaboration aims to shift HDFS into a capital-light model, creating a substantial operational income growth potential. Harley-Davidson anticipates that this transformation will bring HDFS’s operating income back to pre-transaction levels in the near future. The flexibility of this new model also opens avenues for the company to explore further investments while simultaneously meeting the demands of its consumer base.

Jochen Zeitz, Harley-Davidson’s Chair and CEO, expressed enthusiasm about this transaction, indicating that it lays the groundwork for robust financial health and operational agility. Zeitz stated, “This transaction delivers benefits to all of Harley-Davidson's stakeholders...It values the HDFS business at a premium multiple and transforms it into a more capital-efficient business.