Category Archives: Investment & financing

BRP IPO Raises $262 million

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BRP (Bombardier Recreational Products) raised $262.3 million in its initial public offering of 12,200,000 subordinate voting shares at a price of $21.50 per share. The proceeds of the offering will be used to pay down debt. The stock is traded on the Toronto Stock Exchange under the symbol “DOO”. A further $39 million can be raised by BRP if the underwriters of the IPO exercise their options to buy an additional allotment of 1.83 million shares at $21.50 per share. BRP manufactures and markets utility vehicles under the Can-Am brand. Learn more:  PEHub.com

GE Capital to Provide Floorplan Financing for American SportWorks Dealers

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GE Capital’s Commercial Distribution Finance (CDF) business will provide inventory financing to motorsports dealerships that carry American SportWorks products.  American SportWorks sells UTVs under the Landmaster brand as well as several brands of go-carts.  The company is looking to expand their dealer network of approximately 200 dealers.  Learn more:  Wall Street Journal

GE Capital to Provide Financing for GEM

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Commercial customers can now finance GEM models like the el XD through GE Capital

GE Capital’s Equipment Finance business has entered into an agreement to provide financing for GEM’s commercial purchases. GE Capital already provides financing for other product lines sold by Polaris. The agreement with GEM is for three years. The majority of sales for the GEM product line are for commercial customers such as municipalities, universities and resorts. According to GEM management adding a leasing option is an important option for their commercial base. Learn more:  Marketwatch.com

Comment:  Although LSVs/NEVs were originally targeted towards the consumer market, the majority of GEM’s sales through the years have been to commercial customers. SVR predicts this segment will continue to be a strong growth area for LSVs. Historically commercial customers have been more likely to look for leasing options than private customers in the STOV market. For some commercial purchasers they can more easily lease vehicles using funds from their operating budgets than purchase them from a capital budget.

Can-Am Manufacturer BRP Planning IPO

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BRP, the Canadian manufacturer of powersports products including Can Am side-by-sides, ATVs and watercraft as well as Ski-Doo snowmobiles is planning an initial public offering (IPO) on the Toronto Stock Exchange. Ten years ago Bombardier sold the business lines to private investors, the largest being private equity firm Bain Capital with about a 50% stake. The remaining shareholders include the founding family run Beaudier Group with around 35% of the company and pension fund manager Caisse de dépôt et placement du Québec with around 15%. According to the prospectus, “The three shareholder groups are staying invested in the near term and will control all of the company’s multiple-voting shares,….The offering is for subordinate voting shares, which have one vote each compared to the six votes for the multiple-voting stock.”

Originally an IPO was to be completed about five years ago but the recession put it on hold.  Now, with side-by-side market leading the way, the environment is much more favorable as evidenced by the recent stock runs of Polaris and Arctic Cat. The company plans to raise $250 million with the IPO. The funds raised will primarily be used to   payoff debt. According to company financials BRP had sales of $2.9 billion and profit of $121 million for the last fiscal year that ended on January 31, 2013. Learn more:  Financialpost.com

Polaris to Produce Brutus Line in Milford, IA Starting in 2014

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Polaris Industries will be producing their recently launched Brutus line of commercial utility vehicles at a facility in Milford, IA in 2014.  Once the Klaussner-Stylecraft Furniture factory, the site was purchased by Polaris after it was closed in 2011.  A state agency provided the company with $3.6 million in tax credits and the city provided “$1 million in tax increment financing over a 10-year period.” along with putting in a lift station and sewer line. Polaris already produces their GEM line at another location at the site.  Learn more:  Siouxcityjournal.com

Arctic Cat Earnings Call Recap

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Here are some of the highlights from Arctic Cat’s most recent earnings call. They focus on the side-by-side part of the business. Their fiscal year ends March 31.

  • ATV sales (includes ATVs and side-by-sides) increased 28% to $69.6 million from $54.4 million for the quarter compared to last year driven by strong Wildcat side-by-side sales. ATV sales increased 40% year to date to $212.2 million from $151.1.
  • North American side-by-side retail sales increased over 35% for the quarter and year-to-date retail sales increased over 50% driven by both our Wildcat Sports side-by-side and Prowler HDX utility vehicle.
  • Recently announced a new 4-seat Wildcat 1000 model and a new high performance 90-plus horsepower Wildcat model. Both of these will begin shipping in the fiscal fourth quarter.
  • Expect the ATV and side-by-side business to grow sales 36% to 41% for the full year driven by shipments of the Wildcat side-by-side models.
  • “Extremely positive” feedback received from dealers on the new Wildcat models. Extra horsepower is good for dune riding.
  • Demo rides for media and customers went “extremely well” for Wildcat X and Wildcat 4
  • Side-by-side market as a whole is up and estimated 10% and 20% for the year.
  • On option and accessory spending:  Maybe spend $300 or $400 on Prowler or but “…you’re seeing customers that will come in and spend over $1000 and $1500 putting on roof, windshield, things of that nature on a Wildcat.“
  • The 64.5-inch width of the Wildcat makes it more suitable for out west on dunes and more wide open trails rather than narrower ATV trails in the east.

Learn more:  Seekingalpha.com

Polaris Adds To PG&A With KLIM Acquisition

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Polaris Industries announced that they have acquired Teton Outfitters, LLC, a privately owned, Rigby, Idaho-based company which designs, develops and distributes KLIM Technical Riding Gear.  The company’s 2012 sales are expected to reach 30 million, primarily in North America and from the snowmobile market.  KLIM has a presence in the snowmobile, off-road and adventure touring motorcycle markets and a network of 850 dealers.  Polaris management expects to leverage KLIM’s design capabilities and strong brand with the global resources, infrastructure and dealer networks of the various Polaris Industries brands to further boost their growing and highly profitable PG&A business.  The KLIM CEO will remain with the company which will operate as a stand alone business. Learn more:  Seekingalpha.com

Clark Material Handling Acquires EverGreen Electric Vehicles

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Clark Material Handling Company recently acquired EverGreen Electric Vehicles which produces industrial and utility vehicles as well as golf cars.  Clark management sees a good alignment between their current dealer network and the markets that EverGreen serves.  They also believe they can provide engineering, financial and purchasing advantages to EverGreen.

EverGreen has an estimated 25-35 employees across offices in Grand Junction, Colorado and a 30,000 sq ft. production facility in Compton, California.  EverGreen brands include EVE low-speed vehicles, Legacy golf cars, Hoss commercial and industrial vehicles and Goat off-road vehicles.  There was no details on the acquisition costs.  Learn more:  ForkliftAction.com

BRP To Offer Electric Can Am Commander

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An electric Can Am Commander will be available in limited markets starting this July according to BRP management.  The electric side-by-side will have top speed of about 25 mpg (40 km/hr) and a range of 25 to 100 miles depending on terrain, driving behavior and other factors.  The vehicle will be produced at a new assembly plant located in Sherbrooke, Quebec, which will be used for gas vehicles as well.  Select dealers will be used to launch the vehicle in Quebec, Ontario, Alberta, California, Florida, Illinois, New York, Texas and Virginia.  Electric technology for the vehicle was developed at Centre de technologies avancees BRP-University de Sherbrooke (CTA).  Learn more:  Powersportsbusiness.com

Cycle Country Sells ATV Accessories Line

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Earlier this month Cycle Country Accessories Corp announced the sale of it’s ATV accessories line to Kolpin Outdoors for $8 million.  The sale did not include any manufacturing assets but did include the trade name. Subsequently, Cycle Country Accessories changed it’s parent name to ATC Venture Group and subsidiary name to Simonsen Iron Works.  Learn more:  Menafn.com