Indian Motorcycles Gets a New Owner

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00:00For me, this is exciting because, well, number one, we've been covering carve-outs a lot from

00:04private equity. It's a growing trend. But number two, I'm a huge motorcyclist,

00:10big fan of the Indian brand, and I feel like it has been neglected to some extent

00:15under Polaris' leadership. What will you do differently?

00:18Yeah, so first of all, Matt, thank you very much for having me.

00:21You know, on the carve-out market, I believe that's an ever-evolving thing. And with the

00:25current market volatility, we're seeing more and more of these transactions, obviously.

00:29We've been looking at the Indian business since early this year. We're extremely excited to be

00:34the new stewards of the brand. You know, on what we would do differently from Polaris, I'd say

00:38strategically, right now, we're focused on separating the extremely large amount of entanglement

00:44from the parent company and looking forward to telling you a lot more about our strategic plans

00:48in early 2026.

00:49It was never clear, by the way, Danny, you know, Polaris has snowmobiles and side-by-sides,

00:54and they had Victory, which was another brand, and Indian, and you just never really knew that there

00:59was one leader taking one company forward. So that's why, to me, this is...

01:04It feels like that's happening a lot, right, to your point. I mean, we're just talking about it with

01:08Dr. Pepper Keurig that's looking at breaking up and spinning stuff. When you look at the general

01:12deal environment right now, we'll get back to this specific deal in a moment, how many of the

01:16opportunities are that in maybe bloated companies that have underappreciated assets that they're just

01:22sitting on? So for us, personally, about 85 to 90 percent of our pipeline is corporate

01:26divestitures. I think that is a growing portion of the trend. I think when markets become volatile,

01:33people like to tighten up their portfolios and focus on their core businesses, which for us is

01:37a massive opportunity.

01:39I look at this bike, and I think you would be able to take a lot more market share from Harley-Davidson

01:47if you were going to make certain moves. And this is something that, obviously, a lot of companies

01:53have tried and failed at. I think of Ducati, for example, putting out their ex-Diavol. They really

01:56wanted a share of that cruiser market, and I'm not sure how much they got. What do you think the

02:01chances are that Indian can do as well on the street as it has done on the racetrack?

02:07I think the chances are high. I think we have a market-leading product,

02:11a great portfolio of models at this point, and an incredible, passionate team who actively wants

02:18to take market share from our counterparts in Milwaukee. Absolutely.

02:22Can I ask just how different this deal is for you? When I think of Carolwood, you've done a lot

02:26of real estate investments. Is this a turn to focus more on sort of consumer-branded type deals

02:32and companies?

02:33Yeah. So for myself, my background is not in real estate whatsoever. There's a completely separate

02:37team at Carolwood that focuses on real estate. I've been looking at special situations and

02:41corporate divestitures for the last five years. When I joined the platform in January and began

02:47speaking with our two founders at the end of last year, we kind of built out some infrastructure

02:52and, more importantly, in my opinion, some third-party relationships that are critical for doing

02:56these types of deals specifically to target this transaction, these types of transactions this

03:01year. So for me, this is all I work on.

03:04So you're leading the charge, basically.

03:06Absolutely. Yep.

03:07You know, if you look at the economic backdrop, one of the problems with motorcycle sales,

03:12not just at Indian and Harley and Ducati, but across the industry, has been they're very expensive,

03:18right, for the average kid, and that's the buyer you want, to go out and pick up new. So how do you

03:25solve that problem, and what does the economy look like to you in terms of the consumer?

03:28The economy, again, is volatile right now. I believe with a strong enough product and the

03:37incredibly passionate rider base that we have, those two things are able to cut through that

03:42volatility fairly well. Again, of course, market volatility and tariffs were a large part of our

03:48diligence process. I think anyone looking at complex global manufacturing businesses would say

03:53the same thing. But again, we believe in the strength of our product to be able to cut through that.

03:57I wonder if it's just about motorcycles, because I go to the store, the Indian dealership in White

04:01Plains, and obviously I want the bikes, but also I want the hat and the jacket. And I mean,

04:07you could sell so much with that brand because it's so old, because it's so iconic. It makes me

04:13think there are other products you could branch out into.

04:16Yeah, absolutely there are. We definitely have plans to grow our apparel business in the new year.

04:22He's not sharing with me. I know he knows what he wants to do, and he's not.

04:26Well, wait, okay. How about this? So I know it seems crazy to talk about an exit because you're

04:31just buying it, but you don't come up with a thesis without thinking about what the exit looks like,

04:35too. What does an exit strategy look like for a company like this? Is it a strategic buyer?

04:40Is it a return to public markets? What's the gameplay?

04:43I think that's a great question.

04:44And you're not going to answer it?

04:45No, I'm absolutely going to. So Carolwood is fairly unique in the sense that we actually

04:50are an independent private equity firm. We have no institutional investors. We source all our

04:54capital internally. Because of that, we are able to take a longer kind of time horizon approach to

05:00our deals. So we do not have a five to seven year exit strategy for this business. We are a long

05:06term holder. And so when we think about our thesis, we think about developing strong, consistent

05:13growth and strong, consistent cash flow first before we start thinking about an exit.

05:18You can, in terms of what you do want to do or what you don't want to do, you can take

05:24lessons from Harley-Davidson recently, right? Because they brought in this German shoe CEO,

05:31Jochen Seitz, who's, yeah, I think he's a great guy. He's done some great things. But the base

05:36wasn't a fan, right? He had this huge DEI push. He wanted to make a lot more things in India and maybe

05:41Vietnam. And I guess you've got to focus on American made here, don't you?

05:47Absolutely, we do. We bringing in Mike Kennedy, who's going to be the new CEO of Indian was a

05:52critical part of this deal for us. Mike is a Titan of the motorcycle industry, in our opinion.

05:58And again, we are humble enough to understand that we are not experts in the motorcycle space.

06:02And so having him as part of our team makes us incredibly excited. He's been in the motorcycle

06:07business for 30 years. He was at Harley for 26 of those 30 years. He certainly knows their playbook

06:12very well. And so we're extremely excited to have him as our new leader.

06:15What do you think about the flat track racer? You know, because the focus is always on these big,

06:19heavy touring bikes. And I feel like Indian brought out something almost revolutionary and then

06:24didn't really put all of, or Polaris, didn't really put all of its weight behind this little bike.

06:29Yeah, so the flat track racing and kind of FTR play by Polaris in general was something that

06:37came, you know, long, came and went long before we were ever in discussions with Indian. So I can't

06:45comment on their play there. So Spencer, you're coming back and you're going to let us know when

06:49you can give us all these strategy updates, right? Oh, absolutely. I think we have a ton of

06:51exciting things that we can share in early 2026, both on the racing and beyond.

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