Polaris to purchase 24-percent interest in KTM
Companies to cooperate on product, technology, manufacturing and distribution projects
- Potential for relationship expansion in 2007
Polaris will purchase a 24-percent stake in KTM Power Sports AG from an institutional investor for 66.6 million Euros or approximately $80 million funded from Polaris' existing bank line of credit arrangement. This represents approximately a 12 percent discount to the market value of the shares purchased reflecting the size of the block of shares purchased and the fact that the shares are thinly traded. KTM Power Sports AG (formerly known as Cross Holding AG, which is publicly traded on the Vienna Stock Exchange under the symbol CRO), owns and controls KTM Sportmotorcycle AG, a leading European manufacturer of motorcycles with fiscal year 2004 revenue of over 400 million Euros. Over its history, KTM has earned a reputation for providing class-leading, ready-to-race, off-road motorcycles, and recently has entered the on-road motorcycle segment. This transaction, subject to customary closing conditions and regulatory approval, is expected to close during the third quarter of 2005. The actual number of shares purchased and the purchase price are subject to reduction depending upon the number of shares of KTM Power Sports AG outstanding on the closing date.
Polaris CEO Tom Tiller is expected to be named to the KTM Supervisory Board after the closing date of the transaction.
KTM CEO Stefan Pierer is expected to be named to the Polaris Board of Directors after the closing date of the transaction.