Polaris Completes KTM Stock Deal

Polaris Industries Inc. has completed its purchase of 24.9% interest in KTM Power Sports AG, the majority owner of the KTM Group GmbH, from a subsidiary of institutional investor Swisspartners Investment Network Ltd.
The sole business of KTM Group GmbH is the operation of motorcycle manufacturer KTM Sportmotorcycle AG. Swisspartners is a Zurich-based neutral asset management firm with approximately Euro 4.3 billion under management. Its subsidiary, Swisspartners Insurance AG, held the stock purchased by Polaris.
Under the terms of the share purchase agreement, 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 share purchase agreement provides that Polaris may purchase additional shares in the event that, as currently proposed, the outstanding capital of KTM Power Sports AG is increased on or before August 31, 2005 - KTM Power Sports, an 89.2% owner of the KTM Group, has been offered the remaining 10.8% held by the Hofer Foundation. This purchase would bring 100% of the KTM Group GmbH under control of KTM Power Sports.
Polaris' investment in KTM Power Sports AG is expected to be neutral to Polaris' calendar year 2005 consolidated earnings per share and somewhat accretive for the full year 2006. The Minnesota-based manufacturer says the purchase was financed from borrowings under its existing bank line of credit arrangement.
Polaris' new overseas partner, KTM Power Sports AG, formerly known as Cross Holding AG, has served as an investment vehicle for KTM CEO Stefan Pierer and KTM CFO Rudolf Knunz. The name change occurred July 7, 2005, when it was decided Cross would focus on the powersports segment and sell its Cross Services GmbH operation and its share in Rosenbauer International AG, a fire engine manufacturer.
KTM Power Sports AG is currently publicly traded on the Vienna Stock Exchange under the symbol “KTM.”

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