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Arctic Cat Buys Back Suzuki's Stock Shares


(12/28/2011)

Was it a cash deal, or did Arctic Cat write a check?

Press Release-

Arctic Cat Announces Cash Buyback of 6.1 Million Class B Shares from Suzuki Motor Corporation

*All-cash purchase for $79.3 million;

*Arctic Cat expects to end fiscal 2012 with more than $60 million in cash, following Suzuki share purchase;

*Arctic Cat’s outstanding shares reduced from 18.4 million to 12.3 million, while public share float unchanged;

*Suzuki to continue supplying Arctic Cat with snowmobile engines and engine parts, as planned;

 

Dec. 28, 2011-- Arctic Cat Inc. today announced that it has purchased all of Suzuki Motor Corporation’s approximately 6.1 million shares of Arctic Cat Class B common stock for a purchase price of $79.3 million. The stock buyback reduces Arctic Cat’s outstanding shares from 18.4 million to 12.3 million, increasing non-Suzuki shareholders’ ownership of outstanding common shares by approximately 33 percent, and leaves Arctic Cat’s public share float unchanged. Arctic Cat funded this purchase with existing cash on its balance sheet. The company expects to end its 2012 fiscal year with more than $60 million in cash and no debt, after deducting cash used for the share purchase from Suzuki.

As previously announced on June 10, 2010, Suzuki will supply snowmobile engines to Arctic Cat through the 2014 model year, as well as engine parts to service existing engines. Arctic Cat will move snowmobile engine manufacturing to its St. Cloud, Minn., facility, where the company has manufactured ATV engines since 2007.

Commented Claude Jordan, Arctic Cat’s president and chief executive officer: “Based on our current cash position and ongoing cash generation, we feel comfortable with this share purchase and believe it provides great value to our remaining shareholders. Suzuki has been a major shareholder since 1988 and a valued engine supplier for the Arctic Cat brand since 1976. We have benefited significantly from this long-standing relationship. Although Suzuki will no longer have an ownership stake in Arctic Cat, we look forward to continuing to purchase snowmobile engines for the next two model years, in addition to having Suzuki supply Arctic Cat with snowmobile engine parts to service existing engines after that time.”

In conjunction with the buyback of all of Suzuki’s Class B Arctic Cat shares, Suzuki’s representative has resigned from Arctic Cat’s board of directors, effective immediately. This is a position granted Suzuki as part of its ownership of the Class B shares, does not continue following the buyback and brings the total number on Arctic Cat’s board to seven, the majority of which are independent directors.

 



Comments (14):

Ted Loveland says:
12/28/2011 9:51:00 AM

Evidently the lawsuit brought by BRP is not as pressing an issue as first thought!
jeff says:
12/28/2011 11:37:00 AM

Very interesting, although i run a Cat built engine in a quad, i find it confusing why they would want build engines, after the great engines Suzuki has been building us for years. The only benefit i can see is maybe turn around times for new designs. I think that money could be put to better use (ie lawsuit battle). It would be like Dodge saying they are going to build their own diesel to replace Cummins.
Josh says:
12/28/2011 11:39:00 AM

I see their stock is up 19.5% already today, I'm assuming on this news. Apparently the stock holders are pretty happy about it.
alley cat says:
12/28/2011 12:41:00 PM

Get your stock up, and it will be harder to buy you out!
Mike F says:
12/28/2011 12:49:00 PM

I hope they know what they are up to! Maybe this will take my mind off the BRP lawsuit. Don't know what my malfunction is, but it almost feels like I'm being sued. Josh, I really wish I would have purchased a boat load of stock just a few years ago when it was just over three dollars a share! Bought race sleds instead.....a real money maker!
Josh says:
12/28/2011 12:57:00 PM

Mike, if your names not Hibbert, Ebert, or Christian, there's not a whole lot of money in race sleds I'm afraid. That being said, I really enjoy watching the races, and hopefully you got a lot of enjoyment out of the sleds. Like they say, you can't take it with you.
flintstone says:
12/28/2011 2:40:00 PM

good news, now cat can realy turn up the horsepower on the sleds! Bet they go all 4 stroke
artdcat says:
12/28/2011 3:43:00 PM

No more Mr. (Kanga) Ru! Now A/C can bring back JLO, Sachs, Hirth & Wankel. Or start making engines in 290, 340 & 440 configurations! Or maybe that's just a pipe dream.....
JimR says:
12/29/2011 7:09:00 AM

Flinstone you don't have to worry about them doing something stupid like that. They will be building the same engines that Suzuki is building right now with improvements to them. They already design the motors so getting the tooling to build them here is a no brainer.
ryanol says:
12/29/2011 9:32:00 AM

I am with flintstone - I think you'll see a move to fourstroke.
JimR says:
12/30/2011 6:40:00 AM

Wont happen there ryanol: Best selling sleds are two strokes and Cat has openly stated that they will be using both. They have a very special engine coming very soon that will pretty much make 4 strokes obsolete, my gut is telling me.
Captain says:
1/4/2012 1:18:00 PM

JimR, Though I agree a complete move to 4 stroke is unlikely, the best seller from Cat this year was definitely the 4 strokes. You cannot even find a turbo anywhere. Granted they cut back so there are fewer for dealer stock, but every AC dealer I talked to sold more turbos than 800s.
You make them lighter which AC did this year, there is less of an argument by many against a 4 stroke.
JimR says:
1/6/2012 8:23:00 AM

Captain: I am talking sled world wide. Not just cat. If cat wants to be like Yamaha and sell what? 3500 sleds a year then go for 4 stroke. My dealer did not sell one turbo and only two 1100 total with the rest being two stroke.
Captain says:
1/9/2012 8:32:00 AM

JimR, you must have a very small dealer. 2 strokes could only make up something like 25% of a dealer's preseason order. So how many sleds do your dealer sell/order?
You obviously have no clue how many sleds are sold worldwide based on your comment of 3500 sleds. Snowmobile sales worldwide exceeds 165,000 units annually. At 18% marketshare (estimate of AC's marketshare based on previous numbers) that translates to 29,700 sleds annually. A far cry from 3500 sleds.

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