Is Textron selling Arctic Cat to John Deere?

[yamajammer76]

Honestly I don’t see John Deere buying it to just shut it down. Textron just spent millions of dollars on a brand new chassis and engine. If Polaris or BRP bought it yes they would shut it down, but there is no incentive for Deere to do so. Remember everyone said that Textron would pull the plug on sleds. It’s pretty silly they threw millions into new product if that was the plan. Now if you said they put millions into new product to make it more attractive to a buyer then you’d be correct. Textron once did that 45 years ago when they came out with the Indy and then put Hall Wendel in charge with the mission to sell Polaris. Instead the executives at Polaris came together to buy it from Textron, but Textron’s intent was to sell. The new Indy made it more attractive as does the Catalyst and new 858 for Cat.

Deere has stated before they would like to increase production of light consumer goods. Those mowers you see at Lowe’s even the low end are built by John Deere. Some Gator production is contracted out because they don’t have the capacity at their Horicon, WI factory. Also, farmers and construction people are large markets for the snowmobile and sport dirt products. They have the money and their schedules usually work well for this type of recreation. If I had a dollar for every farmer or contractor I met out riding snowmobiles. On the dirt side they also use the products in their business especially for the utility models like the Gator. The problem is Deere doesn’t have sport models for their customers.

John Deere would not be purchasing for the dealers. They already have a strong dealer network. It’s actually an advantage for Deere that Cat has such a wimpy dealer network right now. There would be John Deere dealers that would be happy to take on recreational products if it was an option offered to them. It helps drive traffic to the dealers in the off season. I doubt they’d change the branding of the snowmobiles away from Arctic Cat, but I could easily see the dirt products become John Deere. Using the John Deere brand on them is a lot different than Textron Off Road. Nobody knows what Textron is. It’s a parent company. John Deere is an extremely strong brand with tons of brand recognition.

I’m not saying Arctic Cat branded snowmobiles will last forever, but I think everyone saying that John Deere would be buying it just to axe the line are not correct. As far as an acquisition goes, Cat is healthy from an inventory standpoint. Ski-doo and Polaris have thousands of non current models sitting at dealers. Cat has a few hundred at best. Yes, long term Arctic Cat will probably fall like Yamaha did and then BRP will get aggressive enough on Polaris they will also get out of snowmobiles. Ski-doo being the last brand left would be like a wet dream to those guys even if prices went through the roof and product development stalled.

Regardless what happens I’m looking forward to riding my new Catalyst Riot 600. It’s a well engineered and built sled from everything I have seen. I’m excited to see how it performs. There was someone who wrote about taking a factory tour recently in TRF and the line workers commented they really liked building the Catalyst because it’s a much easier sled to build than the ProCross. I like hearing that. Simplicity is good.

 

[rbig18]

If it happens it is sort of like when IH made the Scout. I would have to assume it was the same argument. Get their regular customer base a reason to visit the dealer.

 

[earthling]

I go to the deere dealer year around for one reason or another, they sell a lot of equipment for winter use. My buddy has an entire fleet of deere equipment that only gets used for snow removal. Having said that, the local box stores are probably not moving as much deere, but the local tractor guys are full of big equipment that is getting serviced for next season.

 

[yamajammer76]

It’s hard to tell what if anything is going on. Employees have reported John Deere has been looking at the factory, but even if that’s true it could simply be they are looking for a new company to contract build their Gators. Something is feeding the latest rumor and whatever it is has people talking. Companies look at other companies as acquisition targets all the time and many times it all falls through and nothing happens.

 

[Attakdriver]

Maybe if the Ag economy was a bit better right now, I could see Deere buying Cat- I don't know if there a more loyal customer than a John Deere customer-

 

[biffdotorg]

I honestly think CFMoto may be back in the market for a sled company after todays email announcement

 

[sideshowBob]

CFMOTO would make sense and on the surface looks like a good fit.

 

[74Nitro]

CFMOTO would make sense and on the surface looks like a good fit.

I wouldn't rule it out especially given CFMoto USA headquarters are in Minnesota.

 

[RAMSOMAIR]

Maybe buy the facility but be stupid to produce snowmobiles in this climate and economy.

 

[yamajammer76]

Maybe buy the facility but be stupid to produce snowmobiles in this climate and economy.

Not necessarily. If a company has a strong dirt business the sleds can be a nice sideline. The problem is Arctic Cat was known for their sleds not their dirt products. It was backwards for them. It wouldn't be for CFMoto.

 

[earthling]

Interestingly, CFMoto and Yamaha already have several shared interests. Yamaha owns 44% and CFMoto owns 50% of Zhuzhou CF YAMAHA Motor Co., LTD. (ZCYM) which is also a sister company of Zhuzhou Jianshe Yamaha Motor Co., Ltd. (ZJYM), itself a partner with Yamaha and the manufacturer of CFMoto products in China.

 

[biffdotorg]

Not necessarily. If a company has a strong dirt business the sleds can be a nice sideline. The problem is Arctic Cat was known for their sleds not their dirt products. It was backwards for them. It wouldn't be for CFMoto.

This is a complimentary good for CFMoto. Their dirt line is really taking off. Their ATV's and now SXS's have surpassed what AC was offering, even the Wildcat XX with the Yamaha engine.

And since CF was already planting roots in many AC dealers before the shut down for dirt offering, it would be an easier transition. The issue I see is CF was not giving any of their dealers protection. They were setting up dealerships upon dealerships with not territory protection. Ticking a few off, but that is another story.

They have a presence in MN, and are shrugging of the "chinese built" stigma that many still share. In Canada, they even offer longer standard warranties on their products. With actual MN production plants and potential sled line, it could be a really good move.

 

[earthling]

CFMoto already has strong dealer coverage and any existing AC dealers are either already looking at moving to another manufacturer (including CFMoto) or getting out of the business. Any existing AC dealers looking to make the manufacturer move may feel burned enough that they want to just jump to a known commodity (Can Am) as it gets them dirt, snow, and water. If I were an AC dealer and the territory was available, that is what I would do. If the territory doesn't allow (existing can am dealer), then I would think CFMoto/Argo and a boat line if it makes sense. If I was a yamaha boat dealer I would definetely think CFMoto.

CFMoto already have a competitive (to AC) SxS, and a competitive UTV. What they would gain in picking up the AC assets is a tighter relationship with Yamaha and potentially access to Yamaha engines and some of its fan base. Creating some synergy between Yamaha boats and CFMoto dirt makes sense. If CFMoto can keep the catalyst and winder alive then they pick up some winter revenue but.. keep in mind that picking up the AC asset also means assuming the AC liabilities (debt, warranty, backlog) so I think it would be a tough call to buy AC once they start digging into the AC business.

 

[vice108]

Sadly - Im not sure it makes sense for any of these established companies to buy Cat. I wish that weren't the case but their dirt lineup is inferior to the others and the snowmobile industry as a whole is in trouble.

 

[biffdotorg]

Sadly - Im not sure it makes sense for any of these established companies to buy Cat. I wish that weren't the case but their dirt lineup is inferior to the others and the snowmobile industry as a whole is in trouble.

It depends on what they are buying. We had this discussion in other forums, and that matters most. And it's possibly not the sleds themselves.

If you buy Arctic Cat from Textron what would you get? A MFG facility in TRF, an engine building facility in St Cloud, the Sled line IP, and the dirt line IP. The human resources (if they have not already found new employment) The dealer network and support chain (which is pretty much shuttered at this point)

For Argo, they have an excellent dirt line but no snow line, same for CFMoto
Argo has MFG facilities in MN already, CFMoto only had final assembly and distribution. With upcoming tariffs, this could have a huge play in CFMoto aquiring a US based facility to do more. (same for Honda back in the day for cars)
The dealer network was already getting infiltrated by CFMoto and Argo, so relationships may already be there. But there is no value on that portion of the purchase