Arctic Cat ATVs made an announcement that it has bought all of Suzuki Motor Corporation’s approximately 6.1 million shares by paying $79.3 million. These shares are of Arctic Cat Class B common stock. The stock buyback has reduced outstanding shares of Arctic Cat from 18.4 million to 12.3 million. This has resulted in the increase of non-Suzuki shareholders’ ownership of outstanding common shares by approximately 33%, albeit the public share float of Arctic Cat remains unchanged. This funding for this purchase came from the existing cash on Arctic Cat’s balance sheet. The company now expects its 2012 fiscal year to end with over $60 million in cash and no debt, after purchasing shares from Suzuki with the cash on its balance sheet.
The president and CEO of Arctic Cat, Mr. Claude Jordan said, “Based on our current cash position and ongoing cash generation, we feel comfortable with this share purchase and believe it provides great value to our remaining shareholders. Suzuki has been a major shareholder since 1988 and a valued engine supplier for the Arctic Cat brand since 1976. We have benefited significantly from this long-standing relationship. Although Suzuki will no longer have an ownership stake in Arctic Cat, we look forward to continuing to purchase snowmobile engines for the next two model years, in addition to having Suzuki supply Arctic Cat with snowmobile engine parts to service existing engines after that time.”
As announced on June 10 of 2010, Suzuki ATVs will continue supply of snowmobile engines to Arctic Cat through the 2014 model year along with engine parts to service existing engines. Arctic Cat will shifting the manufacturing of snowmobile engine to its St. Cloud, Minnesota facility, where the company has been manufacturing ATV engines since 2007.
Along with the buyback of all of Suzuki’s Class B Arctic Cat shares, Suzuki’s representative immediately submitted their resignation from Arctic Cat’s board of directors. Now, the total number of directors on Arctic Cat’s board of directors is seven, the majority of which are independent directors.