Textron seeks buyer for Arctic Cat division
PSB’s sister publication, Snow Goer, reports that Textron is seeking a buyer for its Arctic Cat division as it recently filed a Form 8-K report with the Securities & Exchange Commission.
Textron’s filing says: “Pursuing strategic alternatives for its powersports product line within the Industrial segment’s Textron Specialized Vehicles (TSV) business.”
Textron says that the market for powersports products “continues to remain soft,” therefore, management has begun to review alternatives for the business, aka, a new buyer.
“The consumer end market demand for powersports products continues to remain soft,” the filing continued. “As a result, and in conjunction with its annual operating plan process, TSV has begun to pause production of its powersports products as Textron’s management reviews strategic alternatives for the business. Upon completion of limited production runs to satisfy customer commitments, production of TSV’s powersports products will be paused indefinitely in the first half of 2025.”
The extended halt on production follows an earlier announcement of a production stop until the first quarter of 2025.
A “strategic alternative” could include selling the division to an interested third party. Chatter among industry insiders has focused on brands like Argo, CF Moto, John Deere, Yamaha, and others who, in theory, could be interested in Arctic Cat – both for its current products and for its U.S.-based manufacturing facilities in Thief River Falls and St. Cloud, Minnesota.
However, all the potential suitors for Arctic Cat have been dropped purely as speculation, with few hard facts behind any of it.
UPDATE: Official Statement From Textron
Snow Goer reached out to Brandon Haddock at Textron, and he relayed the following official announcement:
“In response to the ongoing business conditions facing the powersports industry, Arctic Cat will suspend manufacturing operations indefinitely at our facilities in Thief River Falls and St. Cloud, Minnesota, after planned production in the first half of 2025 is complete.
“Textron Inc. also announced that it is exploring strategic alternatives regarding the future of the powersports business. These actions are difficult but necessary as we have continued to experience softness in consumer end-market demand, resulting in a need to reduce costs.
“Arctic Cat remains open for business with respect to selling current inventory and providing aftermarket support and services to our existing installed customer base. Our sales organization, customer service teams, aftermarket distribution centers, and other functions are ready to assist our dealers and loyal customers. We are committed to providing the service and support to keep our thousands of loyal customers riding and enjoying Arctic Cat vehicles.
“We will resume production as planned after the new year to produce units under existing customer commitments. However, once that build is completed, we will suspend operations indefinitely, and will release our manufacturing employees at the Thief River Falls and St. Cloud facilities. Employees who work through their specific completion date will be offered severance benefits.
“We will monitor industry conditions throughout this suspension and make further announcements about our operational plans when we have more information to share.
“We thank our employees, dealers, customers, and supporters for their loyalty, patience, and understanding as we weather the difficult conditions facing our business and our industry.”
Arctic Cat SEC Announcement
The rest of the Textron announcement focused on the short-term financial impact of the move – which is what most filings with the Securities and Exchange Commission typically do.
The filing reads: “As a result of these developments, on December 18, 2024, Textron management approved additional actions at the Industrial segment under Textron’s 2023 restructuring plan. Total pretax special charges related to the 2023 restructuring plan are now expected to increase from the previously announced range of $165 million to $170 million to a range of $190 million to $205 million.
“The increased charges of $25 million to $35 million are related to contract termination costs associated with the powersports production pause. These charges will be recorded in the fourth quarter of 2024, with additional cash outlays of $25 million to $35 million expected primarily in the first half of 2025. We expect the plan to be substantially completed in the first half of 2025. In addition, due to the indefinite production pause, the Company expects to incur an inventory valuation charge in the range of $30 million to $40 million to write down production-related powersports inventory to its net realizable value. Item 7.01 Regulation FD Disclosure The inventory valuation charge discussed above is expected to reduce Adjusted earnings per share for 2024 by approximately $0.12 to $0.16.”
The wider implications for the snowmobile market could be significant as only two OEMs are left in the segment – Polaris and BRP/Ski-Doo. On the off-road side, there are many players that will likely fill the void. However, Arctic Cat has a loyal following and would be an attractive option for the right buyer.
Source: Snow Goer
After Textron bought the company, the selection of atv and utv’s went way done. Arctic cat dealerships are pretty much nonexistent in my area. Was a fan of all there products until Textron bought them. Hopefully some one else buys and turns them around.
I am not sure what has happened to the company as I purchased a 2022 Tracker 800SX UTV from Bass Pro main Store ( Head Quarters) here in Springfield Missouri. For many years I believe Arctic was the leading company for off road vehicles. I ended up buying the 2022 800SX from Bass Pro in Springfield Missouri. Once I made the purchase of the UTV after using it, not happy, as I have had to replace the engine coolant plastic over flow tank 3 separate times, during my times in the woods here in the Mark Twain Forest here in Missouri. Not happy at all. After returning it back to Bass Pro it was a headache as Bass Pro is the only location they would work on it as I reside over a hundred miles from the store. I am not sure what has happened to your company or is it Bass Pro replacing cheaper parts to boost their profits. If I would have known then what I have learned now about the Tracker 800SX I definitely would have not purchased the UTV. I would like to have a returned email from my response, If possible I would like to discuss my concern in further detail with a Arctic representative as I am a firm believer that Arctic is a very good product for out door vehicles, but I believe Bass Pro is doing an injustice service selling the 800 SX Tracker to the public with the problems that we are having with not being able to get replacement parts, or trying to get part numbers for example air filters . From what I have learned if you ask Arctic dealers about the Bass Pro Tracker 800 SX they really don’t help you if I ask Bass Pro about Arctic parts no help. I have looked on numerous UTV parts stores and cannot find anything that Can be purchased for a Tracker 800SX it seems the only way you can get anything thing for Tracker is must go through Bass Pro. You cannot find not one thing for an after market part why ?.. why is that Would like add more information regarding this problem just look on Facebook regarding all the comments about this issue.
Im pretty sure parts from the Arctic Cat Prowler will fit. They are twins. I used to work for an Arctic Cat dealer, I went to a meeting when Textron took over AC, I can tell you they had not much experience as far as want customer’market need. They were promoting back then their Textron Stampede 800 like it was one of the top seller in the u.s. the truth is that It was a piece of sh!t!! Took us 2 years to sell 2 of those.
tracker is a prowler with very few different parts and different stickers.. I work at arctic cat pulling parts to build these
Times change. Sometimes for the better, sometimes for the worse.
The difference between BRP and Textron is that BRP does not run for cover when defense contractors like Textron shake in their boots when anti-war spending Trump wins the White House.
Textron should have suspended it’s war equipment manufacturing and bolstered Artic Cat to ride out this temporary transitory inflation caused softening in the powersports market.
Bad move, Textron. You will regret this in 2 years.
I hope one of those mentioned companies does purchase and revive the Arctic Cat brand before its too late. It was a great brand, with a storied history and passionate riders. Also would be sad if we would only be down to two snowmobile manufacturers left in the world.
Textron should have never bought Arctic Cat, it was always a poor fit and ever since they did they have been slowly killing the Arctic Cat brand, moving many key jobs away from Minnesota and losing passionate employees who were enthusiasts and brand advocates. Half of Argo is former Arctic Cat people, so if they buy it, it hopefully will be easier to get back to business quicker.
Arctic Cat had some of the most loyal snowmobile customers and were on a good path with competitive UTV’s until Textron tried to rebrand the off-road products as Textron (a brand with no customer loyalty) which was a disaster of course.
I have been an Arctic cat owner since the 80’s and it was well managed at the top for years .They were very fast and great hill climbing sleds if you knew what you were doing when it came to gearing ,clutching and jetting for altitude, until efi and great dealer knowledge came along. Love the cats sleds.
Having been an Arctic cat dealer of 5 yrs before Textron bought AC I have seen the destruction of AC first hand. Arrogant Textron from the get-go changed the name of Arctic cat to Textron rather than wait a year continue marketing under Arctic cat and then possibly changing the name. After waiting 3 years for the new Wild Cat from AC,AC was sold to Textron and smart a….).Textron slaps their name on it. Stupid!!!! I can still see former AC wild cat owners come in, that had waited 3 yrs, see the name Textron on the unit and walk back out the door, no thank you! It was down hill from there. Factor in the total chaos from Textron business model, and arrogance it was doomed. So after 2 yrs smart a…..) Textron changes the name back to AC, too late! The destruction of AC falls all on Textron! To put this marketing joke into perspective, if I went and bought Pepsi, would I put my name on it? Don’t think so if I want to survive.