Polaris Announces Sale of Transamerican Auto Parts to Clearlake Capital-Backed Wheel Pros
June 16 2022 - 4:30PM
Business Wire
Advances strategy to re-focus on core
powersports business
Polaris Inc. (NYSE: PII), the global leader in powersports,
announced today it has entered into a definitive agreement to sell
its Transamerican Auto Parts (TAP) business to Wheel Pros, a
designer, manufacturer and distributor of proprietary branded
aftermarket vehicle enhancements for light trucks, SUVs, passenger
cars and ATVs/UTVs backed by Clearlake Capital Group, L.P.
(together with its affiliates, “Clearlake”) and in partnership with
management. The transaction includes TAP’s full portfolio of
operations, including all brands, product lines, manufacturing
operations, distribution facilities, more than 100 4 Wheel Parts
retail locations, and more than 1,700 TAP employees.
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“We have a clear vision to be the global leader in powersports,”
said Polaris CEO Mike Speetzen. “Our decision to divest TAP better
positions us to capitalize on growing consumer interest and demand
for our powersports offerings, while enabling Polaris to focus our
time, people and resources on our core On-road, Off-road and Marine
businesses, along with the parts, garments and accessories brands
that support those customers. In addition, it supports our
long-term financial targets and is expected to have a positive
impact on EBITDA margin. TAP remains a leading omni-channel player
in the Jeep and truck aftermarket space, and we appreciate the
contributions the team has made to Polaris.”
The transaction is estimated to drive $135 million of additional
cash inflows for Polaris in the second half of 2022. This includes
the purchase price from the buyer and realization of cash tax
benefits related to the sale, minus estimated transaction fees. The
sale price, net of cash, debt, and other costs is estimated at $50
million. In 2021, Polaris’ Aftermarket segment generated $930
million in revenue, of which the TAP business accounted for nearly
$760 million. The transaction is expected to close early in the
third quarter, subject to customary closing conditions.
In connection with entering into a definitive agreement to sell
TAP, the TAP business has met the accounting criteria to be
classified as assets held for sale and discontinued operations. In
connection with the transaction, Polaris expects to record an
impairment charge, net of tax, of approximately $140 million.
Baird acted as financial advisor and Jones Day acted as legal
counsel to Polaris in connection with the transaction.
About Polaris
As the global leader in powersports, Polaris Inc. (NYSE: PII)
pioneers product breakthroughs and enriching experiences and
services that have invited people to discover the joy of being
outdoors since our founding in 1954. With annual 2021 sales of $8.2
billion, Polaris’ high-quality product line-up includes the Polaris
RANGER®, RZR® and Polaris GENERAL™ side-by-side off-road vehicles;
Sportsman® all-terrain off-road vehicles; military and commercial
off-road vehicles; snowmobiles; Indian Motorcycle® mid-size and
heavyweight motorcycles; Slingshot® moto-roadsters; Aixam
quadricycles; Goupil electric vehicles; and pontoon and deck boats,
including industry-leading Bennington pontoons. Polaris enhances
the riding experience with parts, garments, and accessories.
Proudly headquartered in Minnesota, Polaris serves more than 100
countries across the globe. www.polaris.com
Except for historical information contained herein, the matters
set forth in this presentation and discussed in the corresponding
earnings call are “forward-looking statements” intended to qualify
for the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements can generally
be identified as such because the context of the statement will
include words such as we or our management “believes,” “should,”
“anticipates,” “expects,” “estimates” or words of similar import.
Similarly, statements that describe our future plans or trends,
objectives or goals, such as future sales, shipments, inventory
levels, consumer demand, net income, net income per share, future
cash flows and capital requirements, operational initiatives,
pricing actions, tariffs, currency fluctuations, interest rates,
and commodity costs, are forward-looking statements that involve
certain risks and uncertainties that could cause actual results to
differ materially from those forward-looking statements. Potential
risks and uncertainties include such factors as the severity and
duration of the COVID-19 pandemic and the resulting impact on the
Company’s business, supply chain, and the global economy; the
Company’s ability to successfully implement its manufacturing
operations expansion and supply chain initiatives; the Company’s
ability to successfully source necessary parts and materials and
the ability of the Company to manufacture and deliver products to
dealers to meet increasing demand and to bring dealer inventory
levels back to optimal levels; the continuation of the increasing
consumer demand for the Company’s products; product offerings,
promotional activities and pricing strategies by competitors;
economic conditions that impact consumer spending; disruptions in
manufacturing facilities; product recalls and/or warranty expenses;
product rework costs; impact of changes in Polaris stock price on
incentive compensation plan costs; foreign currency exchange rate
fluctuations; environmental and product safety regulatory activity;
effects of weather; commodity costs; freight and tariff costs
(tariff relief or ability to mitigate tariffs); changes to
international trade policies and agreements; uninsured product
liability claims; uncertainty in the retail and wholesale credit
markets; performance of affiliate partners; changes in tax policy;
relationships with dealers and suppliers; and the general overall
economic, social and political environment. Investors are also
directed to consider other risks and uncertainties discussed in
documents filed by the Company with the Securities and Exchange
Commission. The Company does not undertake any duty to any person
to provide updates to its forward-looking statements.
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Polaris Media Contact: Jessica Rogers Phone: 763.513.3445
Jessica.Rogers@polaris.com
Polaris Investor Relations Contact: JC Weigelt Phone:
763.542.0525 JC.Weigelt@polaris.com
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