Saturday, March 20, 2010
Harley Davidson has been on a roll the past few weeks on news about a possible leveraged buyout from private equity firm KKR. Harley Davidson has been a holding of the Ten Grand Chicago portfolio since July/2008. I've ridden this thing through the depths of the economic crisis to see it claw its way back up on the company's restructuring and financing moves. The company's financing arm hasn't done any favors for the health of the business, and the rising long term debt over the past 3 years from $980MM at the end of 2007 to $4.1B at the close of 2009 makes it tough for me to understand the reasoning behind any potential buyout. Any leveraged buyout would stack more heaps of debt onto this company and put the new owners in a position for a very long crawl back to fiscal health. I love HOG's, but I'm not expecting any turnaround for a very long time, and neither should any potential suitor.