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Erik Buell Racing goes on the auction block, Hero calls

By By Dave McMahon

Hero MotoCorp buys EBR consulting business  for $2.8 million

The company’s receiver announced that the sale of Erik Buell Racing assets would occur at an auction expected in late July or early August. EBR, based in East Troy, Wis., announced in April that it was closing after anticipated funding failed to materialize. In addition to launching the EBR 1190RS, 1190RX and 1190SX super bikes, Buell’s business designed bikes for India-based Hero MotoCorp., which owned a 49 percent share in EBR.

Powersports Business spoke with Erik Buell prior to the pending sale of the assets, and he’s hopeful that whichever investor purchases the company will make it an ongoing business, picking up the production line where it ended in April when the company filed for receivership.

“Fundamentally, it’s turnkey,” Buell said. “We could literally be shipping bikes out of the building the same day somebody turns the switch back on. Bikes and engines are lined up on the production line, sitting there with plastic covers over them.

“We have great motorcycles that have gotten really good reviews. The SX we hoped to get out quicker, but we had a lot on our hands. We were doing so many projects for Hero plus our stuff that we were just overwhelmed with work and cash needs. We had this big business, but without cash, you can’t operate it. It had to go through this reset. That’s where it is. We have a lot inventory material and finished bikes and lots of parts to make more.”

EBR is currently housed in a 54,000 square-foot manufacturing facility in East Troy, Wisconsin. The entire business, including a substantial inventory of components and completed bikes, will be up for auction in a bidding process between a number of potential buyers at an event managed by the receiver. All bids are subject to court approval, which will be scheduled within a few days after the auction.

“We have this motorcycle company that was shut down in mid-stream, just due to a complete gap in cash. We thought we were on top of the cash, and where the money was coming from. But the funds did not come through, and it was at a moment where we literally had to shut down to avoid not being able to pay our employees for a payroll period,” said Buell, who launched EBR in 2009, weeks after Harley-Davidson shut down Buell Motorcycle Company. “In 2013, Hero had an equity investment of $25 million into EBR, but the next round of funding we had been working on didn’t come through, which was a shocking disappointment for us. About 15 years ago at Excelsior-Henderson, they went through $110 million trying to get a motorcycle company going. All we needed was $10 million more, and we would’ve been able to pull this off for $35 million. But without that, we were done. So we had done an epic job of getting it going in my mind, but close wasn’t enough to pull it off, so it needs a reset.”

Buell is looking forward to what the coming weeks bring for his former company. There are a number of companies that have contacted the receiver and are anticipated to be prospective bidders. The assembly line, a machine shop for prototyping, MTS machines for vibration testing and dynamometers are among the other assets that will be acquired.

“The objective of the receiver and the courts is to sell the company assets for the maximum amount of value,” Buell said. “The consulting business may be split off as a separate sale from the motorcycle business. Other than that, we’re hopeful that the successful bidder will want to resume operations. We’re looking forward to it and looking forward to having a new investor. The amount they’re going to be able to buy this for is going to be incredibly small compared to the value of what we’re bringing — not on only the assets and the bikes themselves, but the brand and the tooling to make the bikes, which is worth tens of millions of dollars.”

Buell said many of the 50-60 existing EBR dealers are doing what they can to support customers.

“Nobody wanted this to happen,” he said. “We just want to get back and be able to support the dealers as quickly as we can.”

The EBR staff had grown to nearly 120 employees, mostly working on the consulting side of the business, Buell added.

According to a press release, Hero MotoCorp announced in late July that it had entered into a “Settlement Agreement” with the “Receiver” appointed by the Circuit Court of Wisconsin. As per the Settlement Agreement, HMCL Americas Inc. has agreed to acquire the ownership of certain tangible and intangible assets of EBR free and clear of all encumbrances, for a consideration of $2.8 million. HMCL and the Receiver have also agreed to resolve all disputes and fully give mutual releases in terms of the Settlement Agreement for all subject matters that are in any way related to EBR, the release said.

The Settlement Agreement is contingent upon the approval by the Circuit Court and the approval of the board of directors of Hero MotoCorp on or before Aug. 10, according to the press release.

The performance of the Settlement Agreement will help Hero MotoCorp’s in-house research and development teams to accelerate development of certain consulting projects, including the projects EBR was executing for the company at the time of filing of the Chapter 128 Receivership, the press release noted.

An auction of EBR assets was scheduled for Aug. 5 at the Milwaukee Athletic Club.


  1. Well, this article is about 3 weeks behind. The motorcycle manufacturing part of EBR was purchased by Atlantic Metals Group on August 5. New owner Bruce Belfer says he plans to restart motorcycle production in East Troy ASAP.


    • Sorry, Hugh. This is the version we ran in our August issue. We've since ran the update in our e-newsletter and on our website: http://powersportsbusiness.com/top-stories/2015/08/11/ebr-gets-new-owner-plans-to-rebuild/


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