KRK1
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Apparently, There Are a Couple Buyers Interested in Arctic Cat's Snowmobile Business
Interested Buyers
- Thread starter KRK1
- Start date
It shouldn't be a surprise that there are multiple offers, that's normal for a distressed asset. It is not uncommon practice for competitors to make some kind of bid just to get access to the 'book', that decision will come down to the risks associated with poisoning their own well with anything they learn under NDA. Whether or not textron gives them access is really a matter of how desperate they are. What is working for AC right now is the whole build american/buy american (BABA) theme running through politics (not a political comment for/against). As long as there is that focus anyone who has capacity/capabilities to create product in the US will probably find some level of support from investors looking to get ahead of the curve should this outlook last. (PE companies in particular)
To make up a scenario, one could make the case that with tariffs in place, Doo should be at least interested now in the manufacturing capacity of AC. Whatever percentage of production/supply chain sourcing that they could claim in the US, would lower costs of doo products sold in the US. Chinese manufacturers could take the same stance. The evaluation of how effective those plans could be is not simple. There are both supply chain issues (AC doesn't make everything in the US) and labor issues to deal with that would have to be offset against the simplicity of staying with what you know and suffering the tariff costs. Again, this is not political commentary but any company outside the US will have to make a tough decision about the short term benefits of acquiring AC vs the long term risk of making the commitment. I don't envy any company stuck in that position today.
To make up a scenario, one could make the case that with tariffs in place, Doo should be at least interested now in the manufacturing capacity of AC. Whatever percentage of production/supply chain sourcing that they could claim in the US, would lower costs of doo products sold in the US. Chinese manufacturers could take the same stance. The evaluation of how effective those plans could be is not simple. There are both supply chain issues (AC doesn't make everything in the US) and labor issues to deal with that would have to be offset against the simplicity of staying with what you know and suffering the tariff costs. Again, this is not political commentary but any company outside the US will have to make a tough decision about the short term benefits of acquiring AC vs the long term risk of making the commitment. I don't envy any company stuck in that position today.
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