Textron Seeks “Strategic Alternatives” For Arctic Cat Division

[Fords4life]

Hopefully somebody will pickup cat, maybe cat pushed the catalyst into production to give cat some resale value with the 858?? It's a damb good sled rode an 858 137 sno pro and a 9r xcr 137 back to back this last weekend and i will say the ride was better on the cat and the front end was more planted and steered better, of course the 9r had more grunt butttt the 858 was very revy and responsive pulled good a peer pleasure to ride, the catalyst is in my opinion now a true contender in class.. such a shame if its all for not!!

 

[earthling]

I would not rule out a purchase by a private equity company. PEs have to put their money to work and focus on distressed assets. It won't be the money that textron is expecting but... better than zero.

 

[biffdotorg]

I don't think CFMoto is going to buy the factory, why would they, they already own multiple that are cheaper to run.

The factory is not what anyone would want to buy. It's the intellectual property. Patents and designs. As you said, they have MFG facilities already that run cheaper. It's the IP that allows them to get to market quicker with a proven sled design through their dealer networks.

The IP on the new engines are worth something as well. Millions were spent designing and testing the CTEC2 600/800 engines as well as the 858. The Catalyst chassis is still an infant that barely got to market, so that IP is worth something as well. So no, buying the factory is the lowest of the assets, the IP may be worth something to someone. But obviously not Textron.

 

[sideshowBob]

Maybe the employees will head some sort of survival strategy for Arctic Cat...but it would have to be in the relatively near future before all the parts supply agreements ect become invalid.

 

[MrSled]

Maybe we pass the hat and @MrSled can purchase the Arctic Cat division of snowmobiles and we make Yamaha's great again!! Who's in?!

Never!! Im just about done with it all too. Cant make something out of nothing.

 

[yamajammer76]

I don't think CFMoto is going to buy the factory, why would they, they already own multiple that are cheaper to run.

That depends. If they feel the tariffs are too high bringing product in from China, CF Moto may very well want a US production site. I still think that the brand, patents, chassis and intellectual property will go to someone else. How they use it? Who knows. If they are just buying brand and intellectual property I could see Polaris going for it and selling 2 brands out of the factory in Roseau. Who knows?

 

[stgdz]

I think it's the dealer network that may have some value to either Deere or Argo.

 

[earthling]

That depends. If they feel the tariffs are too high bringing product in from China, CF Moto may very well want a US production site. I still think that the brand, patents, chassis and intellectual property will go to someone else. How they use it? Who knows. If they are just buying brand and intellectual property I could see Polaris going for it and selling 2 brands out of the factory in Roseau. Who knows?

Patents have a finite life I have no idea how many Cat has that are still relevant. But... patents are only have value if someone is willing to defend them. I don't think Cat is in a position to defend them.

CFMoto has its own engine design business, they could grab the 998 they have and have a competitive motor pretty quickly. Chassis design ,,, chinese manufacturers are very good at copying gross designs like a chassis.

The tariffs will just increase everyones costs as *everyone* outsources (BRP and Polaris included), all boats float on a rising tide and all costs will go up on all imports. CFMoto likely has the lowest cost base with manufacturing and assembly overseas... AND they will be selling to all other countries without penalties whereas Polaris at least will have fewer options to generate sales due to counter tarrif strategies instigated in other countries. CFMoto will likey be hurt the least. A US assembly line would limit the tariffs to the imported parts, but then they would pay US labor rates, US warehousing, keep inventory in the US, etc.. I bet that actually hurts the bottom line more than it helps.

I think it is better than even odds that if someone buys Cat it will be private equity, I doubt argo or anyone else can justify it to a banker or VC. But hey, lets hope someone does. I can see BRP buying the patent portfolio, that makes sense to me.

 

[darv]

There is a strong point to be made with Argo or CFMoto. But the question remains, what would they be buying? The dealer network was abused before a majority bailed.

I many times watch what Country Cat does in Sauk Center, MN. They are the largest dealer, and distributor of dealer returns to AC. They took on Kawasaki and Golf carts years ago when AC was having troubles before Textron bought them out. It was unheard of.

Would a non- winter company like Kawasaki try to make another go of the sled industry? The market is just so tiny and so competitive. It's not a complimentary good. For Argo, it would make the most sense. It plays into their segment well.

country cat said today that yamaha was back in looking at them john deer an CF moto

 

[Fleecer]

The way I interpret that Dealer letter is Textron/Arctic Cat is completely done producing snowmobiles and power sport products after a short run in early 2025 I'd guess for dirt product. That leaves us only Polaris and Ski-Doo for new sleds, and honestly Polaris is not in a real good position either. Sad state of affairs and end of another era for sure.

Yamaha and Cat both now gone in the same year, I didn't see that coming with the introduction of the new Catalyst at all. Figured they would have weathered the storm.

With the catalyst chassis, I thought cat would use this chassis for 10-12 years and then go belly up. With all the money in R and D, and the release of the 858, very surprising they are in dire straights.

With the end of the 998, it will go down as the Holy Grail!! Right now they are a dime a dozen. Should I stock up so I have sleds for a lifetime?

 

[earthling]

With the catalyst chassis, I thought cat would use this chassis for 10-12 years and then go belly up. With all the money in R and D, and the release of the 858, very surprising they are in dire straights.

With the end of the 998, it will go down as the Holy Grail!! Right now they are a dime a dozen. Should I stock up so I have sleds for a lifetime?

Investments like the catalyst happen over years and big companies like textron are looking at quarters and annual performance information (not very often). Its typical that textron would only pay attention at year end, and its likely that cat did not hit some promised threshold of viability for them. While it feels 'sudden' from the outside its probably been brewing for years at textron and someone in finance probably got itchy about carrying cat for another year. The bigger the owner, the higher the stakes and the more sudden everything becomes. The millons that were poured into the 858/Catalyst is such a small amount to textron that its probably been swept under the rug and will be in the big scheme of things.

 

[earthling]

I can see an ex-yamaha exec going to the private equity market with a plan to buy the asset, and a commitment to move everything offshore in the next 5 years. It would require them to pull together a team that has the chops to get it done and a very quick negotiation with Yamaha proper to make sure you have access to the engine technology on the 4 stroke side and service/parts/warrany contracts. Between the two bookends of 'hey, built on yamaha, and this new catalyst is a game changer now that the investment has been spent by someone else' you have a story to tell the private equity companies. Someone is going to have year end money in their portfolio that they have to put to work still. The story would likely be a mix of base revenue built on service/support/warranty/Catalyst plus ATV/UTV, and a commitment to get to a competitive position through innovation. PE companies love distressed assets.

 

[RAMSOMAIR]

Yamaha is smarter than that. With the snowmobile season becoming shorter and shorter (except perhaps the mountain segment) its a dying sport. Sad but true.

 

[sideshowBob]

This may end up being a blessing in disguise for Arctic Cat employees and the City of Thief River Falls. A new player with the resources, the energy, interest, and future vision of market potential may ride over the hill and reenergize Artic Cat's business.
With the incoming US administration that is imposing tariffs and has a mandate to protect and develop American manufacturing and jobs the Thief River falls operation could be very appealing to a new owner, especially an offshore player.
I am an optimist and...hey its Christmas!
Lets hope this all works out well.
JM.02c

 

[Stubbs]

Never!! Im just about done with it all too. Cant make something out of nothing.

Never thought I’d think this way, let alone say it out loud, but I’m with you Sleddy……