Big Dog Motorcycles to Seek New Investors, Possible Sale

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Big Dog Motorcycles owner Sheldon Coleman has hired an investment banking firm to assist in evaluating a possible merger, strategic partnership or sale of Big Dog or its assets. Big Dog and its shareholders will also consider selling additional equity to add capital, other financing options or a recapitalization of the company.

"Given the unprecedented, difficult market conditions, I strongly believe that Big Dog needs to add other equity partners or transition to new ownership to continue to develop and build Big Dog’s innovative products and capitalize on the rebounding economy," says Coleman, the founder and principal shareholder of the Wichita, Kan.-based motorcycle manufacturer.

During evaluation process being conducted by William Blair & Company, Big Dog will continue to sell and develop motorcycles, service its dealers and consumers with warrant needs, parts and accessories. Also during this time, Coleman says he'll continue to lead the company during the transition and that he hopes to be part of any new management team that takes over Big Dog.

Coleman told Dealernews that over the past couple of years, as the economy augured into the ground, Big Dog has steadily been working toward higher efficiency through staff reductions and decreases in production. "We have all the core elements of a company ready to respond to an upswing in the market," he adds.

The company announced in August that it would stop production through the end of the year and that staff members would receive a 20 percent pay cut. The company currently has fewer than 100 employees, down from a peak of about 340 people in 2004.

Coleman predicts that the reaction among the company's dealer network of about 80 dealers will be mostly positive, but acknowledges there could certainly be jitters among an industry that's already been skating along the edge of uncertainty for the past year or so.

Coleman adds that he opted to make very transparent the search for new investors or a possible buyer given close-knit nature of the industry. "Everybody understands where the industry is and where the players are … it's a sophisticated group," he says, adding that the news shouldn't come as a surprise for most given this high level of uncertainty.

"We're all hoping for the best and anticipating that we'll find an excellent outcome," he says.

Coleman says that the company will continue to invest in long-term strategies such as international distribution and developing new models. The company recently opened up distribution in Canada and last year released several new models.

Big Dog Motorcycles started producing motorcycles in 1994 and has build more than 25,000 production custom bikes. In 2010 its lineup include seven models in three classes — pro-street, chopper-style and touring.

by Dennis Johnson