Polaris

Polaris Industries Inc. (NYSE: PII) has agreed to purchase Transamerican Auto Parts Co., a maker of off-road four-wheel-drive accessories, for approximately $665 million. Polaris believes the target’s complementary products create significant synergy opportunities that will extend the buyer’s reach into aftermaket accesories.

Transamerican is a manufacturer and distributor of seven off-road, accessory brands for jeeps and light trucks. The Compton, California-based auto-part maker sells its products through 68  retail stores and a distribution network using mail-order and e-commerce. Transamerican’s seven brands  consist of: Pro Comp, a suspension equipment and wheel supplier; Smittybilt, a maker of body armor and car bumpers; Rubicon Express, a suspension kit and shocks manufacturer; G2 Axle & Gear, an axle kit and drivetrain maker; Poison Spyder, a steering component supplier; rim manufacturer LRG; and Trail Master, a maker of suspension and shock kits. The target generated $740 million in sales for the previous 12 months ended in September 2016.

Headquartered in Medina, Minnesota and founded in 1954, Polaris makes off-road vehicles such as motorcycles, snowmobiles, commercial and military ATVs and golf carts. With Transamerican’s complementary off-road products, the deal extends Polaris’ presence into aftermarket accessories. In 2015, Polaris generated $4.7 billion in sales.

Recent auto part deals include: Crestview Partners’ agreement to purchase Accuride Corp. (NYSE: ACW), a parts supplier for wheel manufacturers, for $124 million; Grakon LLC’s acquisition of Hamsar Diversco Inc., a maker of lighting and electronics for automobile manufacturers; and Watermill Group’s purchase of auto-parts supplier Experi-Metal Inc.

Bank of America Merrill Lynch (NYSE: BAC) is serving as financial adviser to Polaris and Faegre Baker Daniels LLP is acting as legal counsel. Houlihan Lokey Inc. (NYSE: HLI) is acting financial adviser to Transamerican and Sullivan & Cromwell is serving as legal adviser. The deal is expected to close by year-end 2016.

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