NEWS – Polaris Completes KTM Stock Deal
November 28, 2005
Filed under Features
Columbus, Ohio - Polaris Industries Inc. completed its purchase of 24.9% interest in KTM Power Sports AG and three days later, on Aug. 21, KTM officials discussed the deal with retailers assembled here for the brand's annual North American business meeting.
KTM Power Sports AG is the majority owner of the KTM Group GmbH, the owner of motorcycle manufacturer KTM Sportmotorcycle AG. Polaris, through its Austrian subsidiary (Polaris Beteiligungsverwaltungs GmbH) purchased 24.9% of the capital stock of KTM Power Sports AG for approximately Euro 62.6 million ($75.5 million).
The seller of the shares, Swisspartners Insurance AG, is a subsidiary of Swisspartners Investment Network Ltd., a Zurich-based neutral asset management firm with approximately Euro 4.3 billion under management.
KTM Power Sports AG, formerly known as Cross Holding AG, has served as an investment vehicle for its primary shareholders, KTM CEO Stefan Pierer and KTM CFO Rudolf Knunz.
In December 2004, Cross Holding AG, majority led by Pierer GmbH and Knunz GmbH, purchased 48.9% of KTM Group GmbH stock from private equity house BC Partners via a 57 million euro deal. This purchase increased Cross' share of KTM Group to 89.2%.
Cross' name change occurred July 7, 2005, when management announced that, following the majority takeover of the KTM group in December 2004, it would focus on the powersports segment and sell its Cross Services GmbH operation and its share in Rosenbauer International AG, a fire engine manufacturer.
On July 19, the same day the Polaris deal was announced, KTM Power Sports officials said they had been offered the remaining 10.8% of the KTM Group held by the Hofer Foundation. This purchase brought 100% of the KTM Group GmbH under control of KTM Power Sports AG.
One integral part of the KTM/Polaris agreement stipulates that, in 2007, either Cross (now KTM Power Sports AG) may purchase Polaris' interest in KTM Power Sports AG or, alternatively, Polaris may become the majority shareholder of KTM Power Sports AG. The exercise price under both option arrangements would be determined by market-based, predetermined pricing formulas to be derived from operating results of both companies in 2007.
Polaris Industries is traded on the New York Stock Exchange under the symbol “PII.” KTM Power Sports AG, formerly known as Cross Holding AG, is traded on the Vienna stock exchange under the symbol “KTM” (formerly traded under the symbol “CRO”).
KTM Sportmotorcycle AG had sales of Euro 402 million ($491.82 million) in 2004. The company's 1,400 dealers, serviced by approximately 50 distributors worldwide, retail a product portfolio consisting of over 23 different off-road and on-road motorcycles ranging in engine size from 50cc to 990cc.
KTM Sportmotorcycle AG employs approximately 1,500 employees and assembles its engines and motorcycles in Mattighofen, Austria. Additionally, the company owns shock-maker WP Suspension, and manufactures exhaust systems, frames and spoke wheels.
- Guido Ebert