Imagine a world where iconic brands are unleashed to reach their full potential. That's precisely what's happening with Indian Motorcycle, but it comes with a twist that could reshape the powersports industry forever. Polaris Industries, the current owner, is making a bold move: separating Indian Motorcycle into its own independent company. But here's the kicker: Polaris intends to sell a majority stake to Carolwood LP, a private equity firm. What does this mean for the future of the legendary Indian Motorcycle brand, and why is Polaris making such a significant change? Let's dive in.
Polaris Inc. (NYSE: PII) has officially announced its decision to spin off Indian Motorcycle into a standalone entity. To make this happen, they've entered into an agreement to sell a controlling interest to Carolwood LP, a private equity group established in 2014 and located in Los Angeles, California. To put this into perspective, Indian Motorcycle generated roughly $478 million in revenue for Polaris in the year leading up to June 30, 2025 – that's about 7% of Polaris' overall income. Some may see this as a small percentage of Polaris' pie, while others may view it as a significant asset to relinquish.
The Financial Upside (for Polaris, at Least)
This isn't just about shifting assets; it's about optimizing financial performance. The deal is projected to boost Polaris' adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) by approximately $50 million annually, and its adjusted earnings per share (EPS) by around $1.00. The transaction is expected to be finalized in the first quarter of 2026, pending standard closing conditions. Polaris is confident in Indian Motorcycle's prospects under Carolwood's management, and will retain a minority equity position in the company. However, further details of the agreement remain under wraps.
"Polaris and Indian Motorcycle both stand to benefit from this deal, which will enable each business to move faster, deliver industry-leading innovation, and lean further into our respective market strengths," said Polaris Chief Executive Officer Mike Speetzen. "For Polaris, the sale will further strengthen our focus on the areas of our portfolio that offer the strongest growth potential and allow us to accelerate investments in key initiatives and create wins with customers and dealers. It also will unlock greater long-term value for Polaris and our shareholders, with immediate value creation that we expect will become increasingly meaningful over time."
A New Chapter for Indian Motorcycle
Speetzen emphasized that Polaris' investment has revitalized Indian Motorcycle, establishing it as a major player in the global market. He believes that with its current product lineup, global dealer network, and manufacturing capabilities, Indian Motorcycle is well-positioned for success as an independent company. Polaris carefully selected Carolwood as a partner, believing they will build on the brand's momentum and support its future growth. Polaris has pledged to ensure a smooth transition for Indian Motorcycle dealers, customers, and employees.
"Indian Motorcycle is an iconic brand built on American heritage, craftsmanship, and most importantly, a community of riders," said Andrew Shanfeld, Principal at Carolwood. "We're honored to help usher in its next chapter as an independent company and to support its continued growth as a symbol of performance and pride. At Carolwood, we target iconic brands that we can passionately impact. Indian Motorcycle allows us to do just that."
Meet the New CEO: Mike Kennedy
Carolwood has tapped Mike Kennedy to lead the newly independent Indian Motorcycle. Kennedy brings over 30 years of experience in the motorcycle industry. His resume includes roles as CEO of RumbleOn, the largest powersports dealership group in the US; CEO and President of Vance & Hines, a leading manufacturer of aftermarket motorcycle parts; and 26 years in leadership positions at Harley-Davidson. And this is the part most people miss... Kennedy's extensive background suggests a strategic shift towards potentially competing more directly with his former employer, Harley-Davidson. Could this spark a renewed rivalry in the American motorcycle market?
Adam Rubin, Principal at Carolwood, added, "Indian Motorcycle has defined American motorcycling for over a century, and Carolwood's role is to ensure that legacy thrives for the next hundred years. Mike Kennedy brings over 30 years of experience leading iconic motorcycle and performance brands and will play a critical role in stewarding Indian Motorcycle's growth. At Carolwood, we're deeply committed to preserving what makes Indian Motorcycle special, supporting its growth, and empowering the team to write its next great chapter."
What Happens to the Employees and Infrastructure?
The deal includes the transfer of approximately 900 employees to the new Indian Motorcycle Company. This includes engineers, designers, and other staff, as well as manufacturing resources. The manufacturing facilities in Spirit Lake, Iowa, and Monticello, Minnesota, along with the industrial design and technology center in Burgdorf, Switzerland, will also transition to the standalone company. Indian Motorcycle will continue to provide sales, service, and support to its dealers and customers throughout the transition. After the sale, Indian Motorcycle will operate independently of Polaris, selling motorcycles, parts, garments, and accessories through its global dealer network.
A Farewell and a Retirement
Polaris' President of On Road and International, Mike Dougherty, will continue to lead the On Road and International businesses, including Indian Motorcycle, until the transaction is finalized. He will oversee the transition process. Dougherty, who has been with Polaris for nearly 28 years, has announced his retirement upon the closing of the deal. His work helped grow international revenue from under $100 million in 2000 to over $1 billion today, as well as strengthened the On Road businesses. Speetzen thanked Dougherty for his dedication and wished him well in his retirement.
Preliminary Q3 2025 Results
Polaris is scheduled to release its third-quarter 2025 results on October 28, 2025. At that time, management will provide more details about the transaction and quarterly performance. Initial data indicates improvement, with ORV (Off-Road Vehicle) sales (excluding youth models) up by low double digits and continued market share gains in the ORV segment. Polaris expects third-quarter sales to be at the high end of its previously announced guidance of $1.6 billion to $1.8 billion. Adjusted EPS is anticipated to be in the range of $0.31 to $0.41, exceeding original expectations due to higher shipments, strong cost management, and operational efficiency initiatives.
The Big Questions
This separation raises several important questions:
- Will Indian Motorcycle thrive as an independent company? Can it maintain its quality and innovation without the resources of Polaris?
- How will Carolwood's ownership impact the brand's direction? Will they focus on profitability over heritage?
- Can Indian Motorcycle truly challenge Harley-Davidson's dominance? With Mike Kennedy at the helm, could a new era of competition be on the horizon?
- Will Polaris' decision to focus on other segments pay off? Is this a strategic masterstroke or a missed opportunity?
What do you think about this bold move? Is it a win-win for both Polaris and Indian Motorcycle, or is there a risk that one or both companies could suffer? Share your thoughts in the comments below!
