Minnesota-based Arctic Cat is being purchased by Textron Inc. for $247 million in cash, along with the assumption of Arctic Cat’s debt. The sale...

Minnesota-based Arctic Cat is being purchased by Textron Inc. for $247 million in cash, along with the assumption of Arctic Cat’s debt.

The sale to Rhode Island-based Textron, a conglomerate whose products include helicopters and golf carts, follows extended turnaround efforts by the Minnesota company that failed to yield consistent profits or greatly excite consumers with new models.

Arctic Cat was founded in northern Minnesota in 1960 and employs about 1,600 people, mostly in a Thief River Falls, Minn., factory, an engine manufacturing plant in St. Cloud and at the company’s new headquarters in the North Loop. Arctic Cat just moved into the new space in August, after the building’s owner invested millions in renovations for Arctic Cat.

In announcing the sale to Textron, company officials said Arctic Cat’s Minnesota facilities are largely expected to stay intact after the deal closes later this year.

“Arctic Cat’s board believes that Textron’s offer delivers compelling and immediate value to our shareholders,” Arctic Cat CEO Christopher Metz said in a statement. “This transaction presents increased opportunities for the business to leverage our combined scale, accelerate growth and enhance product innovation in ways that will benefit our customers, dealers and employees.”

Textron, with $13.8 billion in revenue and 35,000 employees, agreed to pay $18.50 for each share of Arctic Cat, a 41 percent premium above the company’s stock price at the time of the announcement.

Textron, which also builds golf carts and utility vehicles, is expected to make Arctic Cat part of its “specialized vehicles” business and maintain its current manufacturing, distribution and operational facilities, “with a focus on growing the business,” Textron officials said in a statement about the deal.

Textron Specialized Vehicles produces golf carts, utility and personal transportation vehicles, professional turf-care equipment and ground support equipment. Its brands include the more recognizable E-Z-GO and Cushman labels. Its vehicles are found from golf courses to factories, airports to planned communities, theme parks to hunting preserves. Textron is best known for aviation brands such as Bell Helicopter, Cessna and Beechcraft.

Arctic Cat, in the midst of trying to orchestrate a turnaround, has posted a bigger-than-expected loss for the past four quarters, while its revenue has also missed analysts’ expectations in each of those quarters.

Combined, Arctic Cat and Textron will offer many types of recreational, utility and specialized vehicles. By adding Arctic Cat to its lineup, Textron said it intends to more aggressively invest in product development, dealer networks, marketing and customer service. The completion of the acquisition is subject to customary conditions and regulatory approvals.

“With our recent product introductions in the outdoor recreational vehicle market under the Stampede name, we believe Arctic Cat provides an excellent platform to expand our portfolio,” Textron said.

Prior to the sale, industry analysts had suggested Arctic Cat didn’t have a hefty enough research-and-development budget or a big enough cost structure to absorb price discounts now flowing in an increasingly competitive and promotional environment. Analysts concluded that Arctic Cat had the “most to lose” relative to larger power-sports competitors as industry competition intensified. At that time, Arctic Cat was struggling in a soft power-sports economy, pressured by weak discretionary income in key rural markets. As a subscale operator, Arctic Cat simply did not have the resources necessary to deliver a suitable return on investment as a stand-alone enterprise. Investors were getting increasingly nervous.

Arctic Cat appears to fit well within Textron’s industrial segment, and the larger Textron is in a good position to put to good use Arctic Cat’s proud heritage, innovative history and loyal rider base. The acquisition could also help Arctic Cat expand into different niches, including the military and industrial areas where Textron now plays.

Annual revenue for Textron, the Rhode Island-based golf cart and utility vehicle maker, is $13.8 billion. Arctic Cat has forecast sales of $600 million to $640 million for fiscal 2017, which ends in March. Arctic Cat also forecast it would lose $1 to $1.40 per share, following a loss of 71 cents per share in fiscal 2016.

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