Minneapolis based apparel & sports accessories maker Polaris Industries Inc announced it has completed its purchase of a 24.9 percent interest in Austrian motorcycle manufacturer KTM Power Sports AG, formerly known as Cross Holding AG, through its Austrian subsidiary from an institutional investor.
"This transaction, together with several strategic projects that are cooperatively exploring with KTM, is part of the strategic partnership with KTM that announced last month. The announcement was well received by the dealers, employees, suppliers and shareholders of both companies. They share the view that the relationship will provide substantial benefits to both Polaris and KTM," stated Polaris CEO Tom Tiller.
KTM Power Sports AG (formerly known as Cross Holding AG and currently publicly traded on the Vienna Stock Exchange under the symbol KTM) owns and controls KTM Sportmotorcycle AG, a leading European manufacturer of motorcycles. Under the terms of a share purchase agreement with an institutional investor, Polaris, through its Austrian subsidiary, purchased 24.9 percent of the outstanding capital stock of KTM Power Sports AG for approximately Euros 62.6 million or approximately $75.5 million.
The share purchase agreement provides that Polaris may purchase additional shares in the event that, as currently proposed, the outstanding capital of KTM Power Sports AG is increased on or before August 31, 2005. Polaris' investment in KTM Power Sports AG is expected to be neutral to Polaris' calendar year 2005 consolidated earnings per share and somewhat accretive for the full year 2006. The purchase was financed from borrowings under Polaris' existing bank line of credit arrangement.
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