Arctic Cat Inc. has announced that it has signed a definitive merger agreement under which Textron Inc. will acquire Arctic Cat in a cash transaction valued at approximately $247 million, plus the assumption of existing debt.
The news comes after a sequence of years in which Arctic Cat has faced financial headwinds and has been engaged in a collaborative snowmobile relationship with Yamaha – fuelling speculation that the Japanese powersports vehicle and motorcycle manufacturer may have emerged as an investor or buyer.
Under the terms of the Textron agreement, which was unanimously approved by the Arctic Cat board of directors, Textron, through a wholly owned subsidiary, will commence a tender offer to purchase all outstanding shares of Arctic Cat at $18.50 per share in cash, representing a 40.7 percent premium to the closing price of Arctic Cat's common stock on January 20, 2017
“Arctic Cat’s board believes that Textron’s offer delivers compelling and immediate value to our shareholders,” said Christopher Metz, Arctic Cat’s President and Chief Executive Officer. “This transaction presents increased opportunities for the business to leverage our combined scale, accelerate growth and enhance product innovation in ways that will benefit our customers, dealers and employees.” Textron is a multi-industry company with over $13 billion in annual revenues and approximately 35,000 employees.
Arctic Cat will become part of Textron’s Specialized Vehicles business, maintaining its Arctic Cat brand, as well as its current manufacturing, distribution and operational facilities, with a focus on growing the business. Arctic Cat and Textron Specialized Vehicles have complementary product portfolios of recreational, utility and specialized vehicles. The combined businesses will be well positioned with a wider product line-up, allowing for more aggressive investment in product development, dealer networks, marketing and customer service.
Metz added: “We are proud of the progress our team has made to lay the foundation for Textron to continue taking this company forward. Textron plans to build on Arctic Cat’s strong brand and history of innovation. We expect many Arctic Cat employees to benefit from expanded career opportunities as part of a larger, more diversified company. On behalf of the Arctic Cat board and management team, we thank our dedicated employees for their hard work, commitment and pride in making Arctic Cat an enduring competitor and beloved brand in the powersports market. We are excited about Arctic Cat’s future.”
Nowadays headquartered at Minneapolis, Minnesota, Arctic Cat designs, engineers, manufactures and markets all-terrain vehicles (ATVs), side-by-sides and snowmobiles.
Textron Specialized Vehicles Inc. is a manufacturer of golf cars, utility and personal transportation vehicles, professional turf care equipment, and ground support equipment under names such as E-Z-GO, Cushman, Jacobsen, Dixie Chopper, Bad Boy Ransomes and Douglas.
Its parent company Textron Inc. is involved in aircraft, defense, industrial and finance businesses, with subsidiaries such as Bell Helicopter, Cessna, Beechcraft and Hawker.
