Rev buys Cobra Motorcycle; injects capital

In November, Rev! Motorcycles revealed that it had signed a deal with Bud Maimone to purchase Maimone’s Cobra Motorcycle Mfg. Inc.
Maimone founded Cobra in the early 1990s to bring a race-ready 50cc motocross bike into the market. He succeeded, now offering three 50cc models and a 65cc unit through 75 retail locations in the U.S.
The history of Rev! Motorcycles is a bit harder to decipher. Sean Hilbert, founder of Rev! and president of the new Cobra Motorcycle Manufacturing, described his company as a lifelong dream that picked up steam when it became a study.
“In 1996 I had the opportunity to do a kind of think tank program at MIT for what we called the next generation of manufacturing companies,” Hilbert recently explained to Powersports Business. “What I did during that two years was basically nothing but think about what that may mean for the powersports industry, and how I could apply some of the next generation findings to form a competitive company.
“It really was a business plan that I developed over those two years, and I started putting the team together even before I then went to business school.”
Hilbert’s company as of that point was based on an idea of “individualized focus/mass customization.” In other words, he was working on a notion of offering a two-stroke 250cc off-road unit built to suit each individual customer — from choices with ignition and fuel injection to footpeg placement and body work.
“I went to Ford Motor Company for a couple of years, actually working for Visteon, but at the same time I was raising capital, doing the design work on the prototype bikes and getting the bikes put together,” Hilbert said.
“Well, we hooked up with an investment group out of Cleveland and their first comment was, ‘We like you guys, but you’re never going to find money for a pure start-up.’ So they told us we needed to find a company we could grow with.”
Hilbert said he had been watching Cobra, approached Maimone, and the two decided to work out a deal. Terms of which remain confidential.
“Rev! never sold a motorcycle,” Hilbert said. “We put the time and money into prototype development and a business plan, but through the deal with this group in Cleveland, we put all of our focus on Cobra, choosing to drop further product development.”
A holding company, Cobra Sport, Inc., was set up to hold the stock of Cobra Motorcycle and the assets of Rev!, which Hilbert says included engineering, test and design equipment and software. The company continues to do business as Cobra Motorcycle Manufacturing.
“Bud is an incredible design-by-the-seat-of-the-pants guy, but he never really had a lot of engineering resources at his disposal,” Hilbert said. “Also, one of the things that kept Cobra from growing more than it did during the past decade is a lack of necessary growth capital. So we’re helping out a little in both areas.”
The new Cobra team, 20 in total, includes Hilbert as president; Mike Tinskey, vice president; Mike Burkeen, national sales manager; Philip McDowell, chief engineer; Bill Klim, head of operations; and Maimone, who stays on to continue “creative designs, working with kids and their families to make great bikes, plus a bunch of special projects,” according to Hilbert.

GRASSROOTS COBRA
Maimone built his first bike in 1994 for his son. After 10 months and eventual homolugation by the AMA, the bike became known as the Cobra 50. That year, his son won the AMA National Championship. And, since then, there’s only been one year when Cobra has not won an AMA Amateur National.
Now operating out of a manufacturing facility in Youngstown, Ohio, Cobra designs and manufactures nearly 80% of the components for its bikes. While Hilbert declined to provide production figures, he said the facility has the capacity to produce 5,000 bikes per year.
“Although we have a global supply chain, everything sold by Cobra is built here,” Hilbert said. “It’s a full-blown motorcycle manufacturing company — we design and make all of our own engines, the chassis design is done in-house, and we have a full test facility, full dynamometer facility and three test tracks. We’re not at all an importer that slaps a sticker on a bike.”

PRODUCT PLANS
Cobra plans to launch its flagship ’04 King 50, CM50 junior bike and oil-injected PW3 prior to the Dealer Expo in Indianapolis.
Hilbert said the DC65 was released in limited numbers during 2003 to hear customer feedback and attain AMA homolugation. He said it should return in August 2004 as a 2005 model with a “vastly updated” engine and new chassis.
“So we have three 50s and a 65, plus some other stuff in the works that we can’t talk about,” Hilbert said, adding that the firm would not limit itself only to two-wheelers, but also look at “other opportunities” for the future.