Textron’s Arctic Cat struggles. Could this be the end?

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NIKAL

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I’ve been keeping an eye on the recent news with Arctic Cat & Textron. A couple months ago Textron said due to softening demand, higher interest rates, and overstocked dealer inventory, Textron said Arctic Cat would finish building the 2025 model Snowmobiles and stop all production in December. They would only build a limited amount to satisfy dealer requirements, then they would suspend operations and restart the end of 1st quarter 2025. Then a month later it was pushed out to end of 2nd quarter. Now today 12/18/24 Textron announced that they will suspend operations indefinitely at Arctic Cat and be looking at strategic alternatives. They have also filed with the SEC and break down the financial costs and pretax charges, including their contract termination costs.

It pretty much sounds like Textron needs to find a buyer or they might not restart operations. I was told over a year ago Textron was silently looking for a buyer for Arctic Cat and EZGo. They also shifted both Arctic Cat & EZGo away from Textron and EZGo was overseeing and managing Arctic Cat. I’m told when you see that, it’s typically means they are trying to separate themselves for a sale. Kinda like like Comcast is doing with MSNBC.

Probably a long shot, but I’d love to see Polaris buy Arctic Cat and keep it going. For those who don’t know both companies have a long intertwined history with each other. I’ve written two articles on the history or Polaris & Arctic Cat. It’s very interesting, and explains why I feel Polaris would be the best to get Arctic Cat back on track. I also think they could do it for less money than anyone else. If you want to know my reasons why I think this, just let me know?

But here is the latest news about Arctic Cat, shut down and SEC filings. I hope this is not the end of Arctic Cat.

snowgoer.com

Textron Seeks "Strategic Alternatives" For Arctic Cat Division UPDATED

In an SEC filing on December 18, Textron says it is looking for "strategic alternatives" to its Arctic Cat and powersports group.
snowgoer.com snowgoer.com





snowgoer.com

Textron Seeks "Strategic Alternatives" For Arctic Cat Division UPDATED

In an SEC filing on December 18, Textron says it is looking for "strategic alternatives" to its Arctic Cat and powersports group.
snowgoer.com snowgoer.com
 
SeanRitchie said:
If I had the money, I would buy the offroad division. Good cars, just need a little extra care to bring them back to being a competitive car.
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100%. The biggest problem with Arctic Cat is not just Arctic Cat, it’s Textron. I never understood why they purchased the company, as from day 1 you could see they did not know the industry, they never brought in the right people or were willing to spend some money to build it back up. Arctic Cat was struggling and looking to file bankruptcy if they did not find a buyer with the cash flow to right the ship. Textron came in with the cash flow, but then ignored the company they bought.

For those who don’t know, Textron owned Polaris from 1968 to 1981 and sold it when the market was in a down turn. They again did not put the right people to run it and when the economy had a down turn they wanted out. It was the best thing to happen to Polaris as they brought a guy in to sell it, and he saw the value, and had a group of Polaris management, team up and buy the company.

I hope the right people come in and buy the brand for pennies on the dollar and turn it around. I feel Polaris could do this and capitalize on the legacy the AC name brings, and all the design patents they would receive with the purchase. Because Polaris already has everything needed to run the business, it would probably cost Polaris the least to operate and grow the brand back.
 
madweazl said:
Why would Polaris buy and keep a competing product line?
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There are several reasons why a brand might buy and own another brand. In Polaris case they have been known to buy a brand at the bottom & build it up. Polaris Bought Indian Motorcycles when they owned Victory Motorcycles and made Indian so successful that Polaris eliminated the Victory brand and kept Indian because its name and following were so strong.

Polaris bought Walker Evans shocks, because Walker & Randy wanted to retire. It was said Fox was going to buy Walker Shocks, but the deal fell through and Polaris bought it, so they could continue the Walker Evens Shock trim packaged cars.

Polaris Bought Pro Armor to build it up as a OEM / Aftermarket product line. This gave Polaris an optional identity in the aftermarket that they could not have as an OEM.

If you don’t know the History of Polaris & Arctic Cat, it’s very fascinating. I wrote up a time line of both company’s a year or so ago and put it on several forums. It’s very interesting the relationship between the two and how they are related, connected and how at one point they helped each other.

Buying Arctic Cat would not only protect the legacy of Arctic Cat, and gain a bunch of loyal customers. (The snowmobile customers are extremely brand loyal) But buying AC would get Polaris a ton of patents in several model markets, and the ability to build another vehicle that does not fit in the Polaris styling cues that a brand wants to keep.

Lots of brands buy competing brands to control more of the market share, or to eliminate competition. Some create new brands to allow different creative tastes their primary brand can’t follow. Think Hyundai & Kia, or Chevrolet & Cadillac, Toyota & Lexus. Did you know Toyota owns 20% of Subaru?
 
For those that don’t know the history of Polaris, here is a history timeline I did over a year ago about Polaris.

www.race-dezert.com

The History of Polaris

So I’ve known some of Polaris’s history, but I started reading & watching videos about Polaris and I went down that rabbit hole. I’ve spent a few evenings searching up info as I thought it was really interesting. Here are the clif notes from what I learned. In 1945 Edgar Hetteen, brother Allan...
www.race-dezert.com www.race-dezert.com

Here is the history timeline I did for Arctic Cat. After reading both you will see how intertwined the two company’s are. There are a few posts of information on the Arctic Cat thread.

www.race-dezert.com

The History of Arctic Cat

This one was s bit harder to put together and to put a timeline together. There are multiple variations of some of the timelines. But this is pretty close from what I can tell. The History of Arctic Cat First before learning about Arctic Cat you first have to learn about Polaris. Polaris was...
www.race-dezert.com www.race-dezert.com
 
Welcome to the wonderful world of VC. Not everything makes sense to anyone except the shareholders. And sometimes not even them.
 
Here is another article about the closing of Arctic Cat.

www.startribune.com

Arctic Cat owner stopping all production, could sell the Minnesota snowmobile and ATV maker

Textron Inc. had already announced it was halting factory work in Thief River Falls and cutting the workforce; now, St. Cloud operations also will be affected as powersports industry continues to hit bumps.
www.startribune.com www.startribune.com

Here is another article with an interesting paragraph in the article.

“In a filing with the SEC on Thursday, Polaris said it has amended some of its credit agreements, including increasing the amount of its revolving line of credit and extending some maturity dates.”

So like I’ve been saying, Polaris & Arctic Cat have a long intertwined history and it looks as if still to this day, Polaris has still been helping its little brother Arctic Cat.
 
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Looks like they didnt do to well with 4WP.

2016 Polaris buys 4WP for $665 million
2022 Polaris sells 4WP for $50 million.
 
RIDERED said:
Looks like they didnt do to well with 4WP.

2016 Polaris buys 4WP for $665 million
2022 Polaris sells 4WP for $50 million.
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Exactly, they step out of their wheelhouse and look what happened. IMO Craig Scanlon ran TAP/4WP as his personal piggy bank. Sponsoring his racing teams, sponsoring friends, and everything from multi truck TT teams, KOTH teams, signing drivers to endorsements deals and building his personal 3 vehicle Dakar team all on 4WP dime.

IMO Textron stepped out of their wheelhouse, or better yet, chose to not hire & bring in people from the Powersport Industry to fix & build up Arctic Cat. They allowed the same people who were running it to continue for the most part. And they continued to bank on the snowmobile div to be the primary focus. Then Textron handed it over to EZGo who make golf carts. They repeated 1980/81 all over. A few warm winters, inflation, and the oil embargo decimated the industry, and Arctic Cat had to file for Bankruptcy. They lasted longer than most of their competitors, but could not hold on longer to capitalize on it.

Any Powersport company that says their own analysis and marking team thinks there is no market for a 4 seat sport UTV, is not paying attention and is doomed to fail. Because clearly they are not actually looking at what’s being purchased.
 
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