10 Reasons Why Arctic Cat Was Sold to Textron

Bringing Arctic Cat under the umbrella of an industrial giant like Textron might be just the deep-pocketed boost the struggling underdog needs to push into the motorsport big leagues.

Artist's rendtion of Arctic Cat building with sold sign sticking out the top.
In an all-cash deal, Arctic Cat recently announced it has been acquired by Rhode-Island based Textron Inc., a conglomerate whose products include Bell helicopters and Cessna airplanes. Photo: Arctic Cat

Bringing Arctic Cat under the umbrella of an industrial giant like Textron might be just the deep-pocketed boost the struggling underdog needs to push into the motorsport big leagues — or at least ensure survival, says one longtime observer of the Minneapolis-based snowmobile and ATV maker. This is according to industry analyst Robert W. Baird, equity analyst Craig Kennison, as he stated in a Minneapolis Star Tribune interview.

Here are 10 reasons he gave as to why Arctic Cat was sold to Textron: 

  • Larger competitors like Polaris Industries, Bombardier and Honda (ATV) are growing and dominating the snowmobile, ATV and motorsports markets.
  • A general softening of the ATV market over the last year or so.
  • Too much unsold inventory – Arctic Cat had troubles clearing dealer inventories.
  • Trouble supporting new product research-and-development
  • Facing an increasingly competitive sales and promotional environment
  • Challenges in upgrading its dealer network
  • Not having a big enough cost structure to absorb aggressive price discounting
  • Pressured by weak discretionary income in key rural markets
  • Did not have the resources necessary to deliver a suitable return on investment as a stand-alone enterprise
  • The company was struggling in a soft power-sports economy

On Wednesday, January 25, 2017, Arctic Cat announced it was been acquired by Textron Industries for $247 million in an all-cash deal. Textron Inc, is a Rhode Island-based conglomerate whose products include Bell helicopters, Cessna airplanes, Jacobsen Lawn Mowers and E-Z Go golf carts.

Read the entire Star-Tribune article here....

http://www.startribune.com/analysts-textron-might-have-the-deep-pockets-arctic-cat-needs/411816586/

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