What happened 

Shares of motorcycle maker Harley-Davidson (HOG -0.62%) jumped as much as 19.5% in trading on Monday after the company announced that its electric-vehicle business will be acquired by a special-purpose acquisition company (SPAC). Shares didn't hold those gains, though, and are up just 5.6% at 2:30 p.m. ET.

So what 

This morning, Harley-Davidson announced that LiveWire will be acquired by AEA-Bridges Impact Corp. (IMPX). The deal will put an enterprise value of $2.31 billion on the business, including about $600 million in cash expected on the balance sheet. 

LiveWire electric-vehicle motorcycle.

Image source: Harley-Davidson.

Harley-Davidson will own 74% of the company, and will help with engineering and manufacturing. The theory here is that LiveWire as a separate company won't be bogged down by Harley-Davidson's brand with a new generation of electric motorcycle buyers. 

Now what 

Like most SPAC deals, there are very optimistic growth targets attached to this deal. In a presentation for investors, management said they expect to increase total unit sales from 387 in 2021 to 100,961 in 2026, with revenue jumping from $6 million to $1.5 billion.

Those are incredibly optimistic targets given how small LiveWire's business is today. And given how choppy the SPAC market has been, I wouldn't assume that the merger will go off without a hitch. This is a deal I'm skeptical of, and I'm certainly not buying this struggling EV business today.