Following the January announcement that it has bought the eBike manufacturing operations of Brammo, Minneapolis based Polaris Industries is back on the acquisition trail again.
The company has announced that it has signed an agreement to acquire HH Investment Limited (”Hammerhead”), a manufacturer of gasoline powered go-karts, light utility vehicles, and electric utility vehicles in Shanghai, China. The Company markets its products globally under the Hammerhead Offroad brand, and is a private label manufacturer for other OEMs.
“Hammerhead provides Polaris with a unique opportunity to expand both our international manufacturing footprint and our armada of off-road products”, said Scott Wine, Polaris Chairman and CEO. “We are impressed by the entrepreneurial spirit and passion for innovation of the Hammerhead team, and look forward to pursuing new customers in new markets with their high-quality and low-cost off-road vehicles. We are excited to establish Polaris’ operational footprint in China and believe the opportunities for further international growth are significant”.
Hammerhead’s main manufacturing operation is located in Shanghai, China, near Polaris’ Chinese subsidiary. Hammerhead also has an operation located north of Dallas, Texas responsible for light assembly and sales distribution of its products in North America. Hammerhead will continue to market its products under the Hammerhead brand and operate under its current leadership structure as a stand-alone entity.
“I am thrilled at the opportunity to make Hammerhead a part of Polaris and its growing portfolio of global brands”, said Jerry Qiu, Chairman of Hammerhead. “I am very proud of what we have built at Hammerhead. We share the same enthusiasm and passion for off-road vehicles as Polaris and look forward to sharing our mutual expertise as we take our products, engineering and manufacturing skills to the next level”.
Polaris' annual sales topped $4.5 billion in 2014, with its shares trading in the $1.40 plus region, and annual dividend increases continuing apace (Polaris has announced a further 10 percent hike in shareholder dividends already this year) - this from a low of around $1.5 bn of sales and a share price of under $8.00 as recently as 2009.
The company is said to be sitting on a considerable cash-pile and healthy balance sheet, has been an active investor in new facilities, strategic partnerships and acquisitions ever since 48 year-old Scott Wine became CEO in 2008.
Perhaps best known as one of the originators of snowmobiles back in the 1950s, and currently for its UTV, ATV and side-by-side vehicles, the company first got into the motorcycle business in 1998 with the launch of its Victory brand and has recently been attracting attention with its 2011 acquisition and subsequent re-launch of the Indian Motorcycles brand.
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The company had tried to get into the motorcycle business in 2005 when it purchased a 25 percent interest in KTM, but that deal was cancelled a year later. In 2010 Polaris bought the PowerSports operations of its long-time collaborator (4-stroke Weber engine and 500cc V4 500cc race engine provider) Swissauto.
In 2011 Polaris bought Chrysler's GEM (Global Electric Motorcars) operation, Groupil Industrie, the French modular on-road commercial electric vehicle manufacturer, and an initial 8 percent stake in Brammo.
In 2014 Polaris bought another French company, Aixam Mega, an electric vehicle manufacturer. New facilities in Mexico in recent years and the January announcement of a planned new 600,000 sq ft/58,000 sq m manufacturing facility at Huntsville, Alabama follows last year's opening of its first manufacturing facility in Europe - a 345,000 sq ft/33,000 sq m UTV/ATV manufacturing plant in, Poland, and in recent years has made several upgrades at its existing Minnesota, Iowa, South Dakota, Wyoming and Wisconsin facilities
The company has also been buying aftermarket parts, accessory and apparel product lines - such as Klim riding apparel, Pro Armor off-road products and Kolpin ATV/UTV products.
Last year saw Polaris follow CanAm into the three-wheeler market with the launch of its Slingshot brand.
This year will see a 50/50 manufacturing facility joint venture with Eicher Motors in India come on stream - Eicher is the owner of the fast growing Royal Enfield motorcycle program. The company plans to produce highly fuel-efficient and inexpensive 600cc Greaves Cotton diesel powered four wheel delivery vehicles there later this year for sale on the domestic Indian market.
HH Investment Limited is a global manufacturer of off-road vehicles, manufacturing a portfolio of gasoline powered go-karts, light utility vehicles and electric utility vehicles with power ranging from 49cc to 500cc. The go karts are primarily recreational while the light utility vehicles are suited for lawn and garden.
www.hammerheadoffroad.com
www.polaris.com
