More Juice Coming To Genuine/Scooter Works
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- hardd1
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More Juice Coming To Genuine/Scooter Works
Good News!!!....
Investment firm recapitalizes Genuine Scooters, Scooter Works USA......
Publish date: May 9, 2011(Dealer News)
Chicago Associates Inc. has recapitalized Genuine Scooters LLC and its parent company Scooter Works USA, according to a news release from Livingstone Partners, an independent investment firm that acted as a financial advisor to Scooter Works. The deal terms were not disclosed.
“Livingstone understood the brand value of Genuine Scooters,” said Phil McCaleb, Scooter Works’ founder and CEO. “They positioned us to secure the equity we needed to continue to grow and compete with the big guys and had our backs at every turn.”
Investment firm recapitalizes Genuine Scooters, Scooter Works USA......
Publish date: May 9, 2011(Dealer News)
Chicago Associates Inc. has recapitalized Genuine Scooters LLC and its parent company Scooter Works USA, according to a news release from Livingstone Partners, an independent investment firm that acted as a financial advisor to Scooter Works. The deal terms were not disclosed.
“Livingstone understood the brand value of Genuine Scooters,” said Phil McCaleb, Scooter Works’ founder and CEO. “They positioned us to secure the equity we needed to continue to grow and compete with the big guys and had our backs at every turn.”
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- jasondavis48108
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What does this mean in normal human speak? Scooterworks got an influx of cash?
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"All that glitters is not golden" - Shakespeare
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"I must not fear. Fear is the mind killer ..." - Dune
- Skootz Kabootz
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- pcbikedude
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It means that they are using other people's money to run the business instead of their own.
This is a good thing but it comes with strings. It proves that they have a successful enough business that someone is willing to invest in it. However, those people DO and should expect a reasonable return on their money. Their return might come as an IPO or selling the company to a larger competitor.
Is it ultimate a good thing? Depends on if the re-capitalization is enough to fuel future growth. Maybe filling out the Genuine stable of products (i.e. Cruiser scooter) is their goal. Or, it just maybe providing capital in order to keep existing product in the showroom. Who knows at this point?
This is a good thing but it comes with strings. It proves that they have a successful enough business that someone is willing to invest in it. However, those people DO and should expect a reasonable return on their money. Their return might come as an IPO or selling the company to a larger competitor.
Is it ultimate a good thing? Depends on if the re-capitalization is enough to fuel future growth. Maybe filling out the Genuine stable of products (i.e. Cruiser scooter) is their goal. Or, it just maybe providing capital in order to keep existing product in the showroom. Who knows at this point?
The scenery only changes for the lead scooterist.
- Rippinyarn
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That's good news, and a huge vote of confidence by the investment community. I've heard that the "Stella Saga" cost the company "millions of dollars" and I hope that this at least takes the pressure off cash flow during this scooter mini-boom.
We love Genuine for what it is (a bunch of passionate scooterists) but some sound money management will help take the pressure off them and may just benefit the product line sometime soon
We love Genuine for what it is (a bunch of passionate scooterists) but some sound money management will help take the pressure off them and may just benefit the product line sometime soon
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Normally I would say its a good thing but knowing the mentality of profit driven US investors and their influence on the US auto industry and what happened to Harley Davidson when ATF investors stepped in, I wonder! Only time will tell. When ATF invested in HD and almost killed it in the 70's there was a saying owners spent more time pushing there bikes then riding them.
- pcbikedude
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American Machinery and FoundryPeteH wrote:AMF ?
Remember Livingstone is an investment company. They are not enthusiasts. There must be some significant value of Genuine for there to be interest. Where they are going to get their return-on-investment remains to be seen.
The scenery only changes for the lead scooterist.
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- ericalm
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This is a MUCH different deal than the AMF/Harley deal in the '70s. What almost ruined Harley during that time was changes to the product and manufacturing that turned the faithful away and diluted the brand.
How to almost kill Harley: Brand the motorcycles the same way you brand your line of bowling equipment. Yikes.
For most owners and would-be buyers, this recapitalization will be an unseen, behind-the-scenes deal.
IMHO, what this provides is stability and a hand up after the past few very lean recessionary years and the cash to make some moves to improve Genuine's position in the market and allow for some growth. The Stella issues were costly but also came at a time when US scooter sales dropped over 70%, parts and accessory sales also plummeted and dealers were dropping like flies. Like a lot of businesses, it's one thing to survive, but to move forward there needs to be cash flow.
As big as they may seem to us, Genuine is really an underdog when compared with other scooter companies they compete with. Even SYM and Kymco are fairly large multinationals when compared to Genuine. Though Genuine imports and distributes scooters manufactured by other companies, it's a much different business model than domestic distribution for the other Taiwanese makes.
How to almost kill Harley: Brand the motorcycles the same way you brand your line of bowling equipment. Yikes.
For most owners and would-be buyers, this recapitalization will be an unseen, behind-the-scenes deal.
IMHO, what this provides is stability and a hand up after the past few very lean recessionary years and the cash to make some moves to improve Genuine's position in the market and allow for some growth. The Stella issues were costly but also came at a time when US scooter sales dropped over 70%, parts and accessory sales also plummeted and dealers were dropping like flies. Like a lot of businesses, it's one thing to survive, but to move forward there needs to be cash flow.
As big as they may seem to us, Genuine is really an underdog when compared with other scooter companies they compete with. Even SYM and Kymco are fairly large multinationals when compared to Genuine. Though Genuine imports and distributes scooters manufactured by other companies, it's a much different business model than domestic distribution for the other Taiwanese makes.
Eric // LA Scooter Meetup Group // Stella 4T // Vespa LX // Vespa LXS // Honda Helix // some, uh, projects…
- Syd
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I hope it turns out well, but major financial investment in a company usually means at least partial control over that company. Face it, private equity companies are in it for the money, and far too often the company that gets the money initially ends up with little more than a NASDAQ listing and huge debt. I hope that the deal is more a loan than a buy-in.
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- pcbikedude
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In a lot cases that happens. They lever every asset (borrow against) get the cash out. Then cash-out additionally by public offering.Syd wrote:Face it, private equity companies are in it for the money, and far too often the company that gets the money initially ends up with little more than a NASDAQ listing and huge debt. I hope that the deal is more a loan than a buy-in.
A lot depends on how much control the current owners will continue to have. That depends on how much of their own money will be in this partnership.
The scenery only changes for the lead scooterist.
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As long as they own 51% of the stock or partnership they will have control. But if they make the mistake like so many companies have of selling off more then 51% to different investors with the idea that owning majority shares is just as good, a hostel takeover could ensue. Any investor that manages to gain 51% of controlling shares can walk into the boardroom and declare control!
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