Arctic Cat Inc. announced that it will soon be bought by Textron Inc. for approximately $247 million in cash, plus the assumption of existing debt. Textron, a global network of aircraft, defense, industrial and finance businesses, claims more than $13 billion in annual revenues and employs approximately 35,000 people.
Under the terms of the definitive merger agreement, which was unanimously approved by the Arctic Cat board of directors, Textron 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 Jan. 20, 2017.
Arctic Cat anticipates that tender offer materials will be provided to shareholders no later than Feb. 7, 2017. The completion of the acquisition is subject to customary conditions and regulatory approvals.
“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.”
Arctic Cat will become part of Textron’s Specialized Vehicles business, maintaining its iconic 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 plan to offer a wider product lineup, and allow for more aggressive investment in product development, dealer networks, marketing and customer service. Arctic Cat currently is based in Minneapolis and employs about 1,600 people.
“We are proud of the progress our team has made to lay the foundation for Textron to continue taking this company forward," said Metz. "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.”
Baird is serving as financial advisor and Fredrikson & Byron is serving as legal counsel to Arctic Cat. Shearman & Sterling LLP is serving as legal counsel to Textron.
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