MAG Files For Bankruptcy – And It’s Huge News
MAG (The Motorcycle Aftermarket Group) Is In Serious Financial Trouble
The Motorcycle Aftermarket Group (MAG) might not be a household name to you but many of its subsidiaries, like Roland Sands Design, Vance & Hines, and Renthal, probably are. That’s why it’s quite the big problem if the company goes under, because many of us will be affected in one way or another. You see, MAG is one hell of a huge company, and it’s the parent of a lot of key industry brands. Now that MAG has filed for Chapter 11 bankruptcy here in the USA, the future of those brands is uncertain.
MAG Files For Chapter 11 Bankruptcy
If you’ve got a soft spot for Performance Machine wheels or a liking for Renthal handlebars, then this might be unwelcome news. MAG has been busy over the last few years, but unfortunately, they’ve also been accruing an awful lot of debt: $440 million of it, to be precise. However, it’s not all doom and gloom just yet. MAG plans to get rid of $300 million of that debt through a series of financial deals and a transfer of ownership to three investment companies (Monomoy Capital Partners, BlueMountain Capital, and Contrarian Partners), with the hope that the three new owners can appoint some new leadership and steer the ailing company back on course.
However, there are still debts to pay – and it hasn’t been a great year for MAG. For 2017, the company has reported a sales slump of 20% from last year and an overall earnings drop from 2016’s $46 million, to 2017’s $20 million. While MAG might not be money rich, they’ve got plenty of attractive looking assets they can carve up and sell. That could either be a good thing or a terrible thing, depending on who’s buying what. You might get a buyer with a vested interest taking on one of the subsidiaries and continuing its hard work…or you might get a buyer who wants to butcher the carcass for all its worth. If you’re interested in knowing what brands might go under the hammer, here are some of the big players:
- DFR Acquisition Corp.
- Ed Tucker Distributor, Inc.
- J&P Cycles, LLC
- Kuryakyn Holdings, LLC
- MAG Creative Group, LLC
- MAGNET Force, LLC
- Motorcycle Superstore, Inc.
- Motorcycle USA LLC
- Motorsport Aftermarket Group, Inc.
- Mustang Motorcycle Products, LLC
- Performance Machine, LLC (owners of RSD)
- Ralco Holdings, Inc.
- Rally Holdings, LLC
- Renthal America, Inc.
- Tucker Rocky Corporation
- Tucker-Rocky Georgia, LLC
- V&H Performance, LLC (Vance & Hines exhaust systems)
- Velocity Holding Company, Inc.
- Velocity Pooling Vehicle, LLC
There are quite a few you recognize, right? It’s not good news at all. Hopefully, the new financial restructuring will help put MAG back on track without too many hiccups. The motorcycle industry could do without another devastating blow, and we hope MAG can ride this one out without any casualties at all. Fingers crossed.