Polaris, KTM in $80 Million Deal
July 19, 2005
Filed under Uncategorized
Polaris Industries Inc. has agreed to pay approximately $80 million for a large piece of KTM, a move that would give the Minnesota-based manufacturer an expanded retail network in Europe and valuable insight to off-road motorcycle production. At the same time, it offers the Austrian company strengthened presence in the United States and accelerated entry into the worldwide ATV market.
Polaris says it plans to purchase 24% of KTM Power Sports AG, the majority shareholder of KTM Sportmotorcycles AG, from an institutional investor for 66.6 million Euro. The transaction is expected to close during the third quarter of 2005.
KTM Power Sports AG, formerly known as Cross Holding AG, owns 99.77% of KTM Sportmotorcycles AG, and is publicly traded on the Vienna Stock Exchange under the symbol CRO. Principal shareholders are KTM CEO Stefan Pierer and KTM CFO Rudolf Knunz.
"Polaris can benefit from KTM's substantial experience in motorcycles, an outstanding brand, leading technology, and a solid manufacturing presence and dealer network in Europe,” Polaris CEO Tom Tiller said in announcing the deal.
"By joining forces, we believe we can strengthen KTM's presence in North America, reduce our production costs, spread our development costs over a larger base, and substantially accelerate our entry into the ATV business,” said KTM CEO Pierer. “We also look forward to sharing both chassis and engine technology with Polaris.”
Read more in the July 25 edition of Powersports Business magazine.