Cfmoto snowmobiles

[Fast]

Anyone hear about cfmoto making sniwmobiles?

 

[jonlafon1]

Nothing more then RUMORS/speculation at this point. The dirt product they produce is not terrible.

 

[KnappAttack]

There is speculation. Nothing set in stone yet or announced, but looks like they may buy Cat from Textron. It'd be nice to keep Cat going, be a shame to loose another mgr. They just announced a sponsorship for the entire snow cross series so to me thats a good indication it could come to fruition.

Saw this this AM.

 

[actionjack]

CFMOTO USA To Sponsor Entire 2024-2025 National Snocross Season | AMSOIL Championship Snocross

Not that much of leap to see them buy Cat considering the sponsorship.

 

[Srxspec]

If CF Moto wanted to be in snowmobiles, they would already be here. I can't see them buying Arctic Cat with Cat's debt load coming with the purchase, just makes no business sense.

 

[RAMSOMAIR]

Zero business sense.

 

[STAIN]

Cat's debt load

What debt load do they have? I know they were in the red when Textron bought them, are they still ?
Just asking, I have no idea or insight...

 

[earthling]

What debt load do they have? I know they were in the red when Textron bought them, are they still ?
Just asking, I have no idea or insight...

The debt probably never went away, it was likely just allocated differently. Big companies buying little companies allows debt to be moved where it makes sense. I guarantee that during the sale textron will be loading the deal with debt wherever they can, it will be one of their big drivers in the sale.

 

[Upstater57]

Textron took a 40 million charge off to reduce inventory cost on top of almost a 200
million loss and reduced the Textron stock dividend. They are pricing the company to sell, eating the debt. The buyer gets all the assets including the engine factory and a brand new sled line. Hope someone wants the company before Textron sells off pieces of it.

 

[earthling]

As I understand it, Textron took a write down of $30-$40m because the fair market value of the asset (arctic cat as a business) is below the cost that the business will generate at the time of sale. In declaring the write down, they identified the loss as associated with inventory, typically this will be inventory that was carried (old parts) which no buyer is going to pay you for. From a buyers perspective, they are buying the go-forward business operations and they see the old inventory and backlog of old contractual commitments as neutral or negative value. That isn't eating debt, its the opposite, it is basically stating that they carried that backlog of inventory as value (likely leveraged) in the books but they aren't going to get paid for it because it was used on the service side of the business, not new sales which is the only thing the buyer is going to find interesting. e.g. an active company (like CFMoto) would only be interested in the brand and the new product sales. A private equity buyer would take the same position while quietly adding up how much they could liquidate the inventory for. Either way, it was value that could not be realized, hence the write down. Maybe they ate the debt in the restructuring costs already why do that, companies aren't allergic to debt.