Polaris Sells Auto Parts Business

By Staff Writer June 21, 2022

Polaris Inc. has entered into a definitive agreement to sell its Transamerican Auto Parts business to Wheel Pros, a designer, manufacturer and distributor of proprietary branded aftermarket vehicle enhancements for light trucks, SUVs, passenger cars and ATVs/UTVs backed by Clearlake Capital Group, L.P. (together with its affiliates, “Clearlake”) and in partnership with management. The transaction includes TAP’s full portfolio of operations, including all brands, product lines, manufacturing operations, distribution facilities, more than 100 4 Wheel Parts retail locations, and more than 1,700 TAP employees.

The transaction is estimated to drive $135 million of additional cash inflows for Polaris in the second half of 2022. This includes the purchase price from the buyer and realization of cash tax benefits related to the sale, minus estimated transaction fees. The sale price, net of cash, debt, and other costs is estimated at $50 million. In 2021, Polaris’ aftermarket segment generated $930 million in revenue, of which the TAP business accounted for nearly $760 million. The transaction is expected to close early in the third quarter, subject to customary closing conditions.

In connection with entering into a definitive agreement to sell TAP, the TAP business has met the accounting criteria to be classified as assets held for sale and discontinued operations. In connection with the transaction, Polaris expects to record an impairment charge, net of tax, of approximately $140 million.

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Last modified on Tuesday, 21 June 2022 02:22