POLARIS INDUSTRIES INC.
(PII)
Presented to:
Ms. Minerva Cooper
Catalytic Concrete Company
Prepared by:
Lucas Trujillo
HMM Strategy Analyst
April 20th, 2015
Holland, Martin and McCormick
1593 University Parkway Suite 9C
Winston-Salem, NC 27105
Ms. Minerva Cooper
Catalytic Concrete LTD
600 Concrete Way
Research Triangle Park, NC 27709
Dear Ms. Cooper:
This report, at the request of the Catalytic Concrete board of directors, delves deep into Polaris
Industries Inc. and discusses whether or not the company should be considered as a potential
takeover target. The contents explore many aspects of Polaris in an a6empt to explore the
possibility of diversi7cation and to examine the company as a possible outlet for risk.
A takeover by Catalytic Concrete would diversify risks associated with a large amount of cash
assets based around a single-product-reliance for company revenues. The report shows that in
the rapidly expanding ATV Industry, Polaris has established itself as an industry leader. The
company places emphasis on customer satisfaction as well the physical design and an efficient
production process. Due to these important values, Polaris Industries has retained constant
profitability and an incredible reputation for countless years. Even though the products can be
easily misused or rather, used in an irresponsible manner for recreational purposes, Polaris
makes sure that their cu;ng edge designs exceed all safety expectations and that their vehicles
provide riders with a positive, work-e9cient, exhilarating yet extremely safe experience. Polaris
also places emphasis on their employees and serving the “customer 7rst,” through high
esteemed customer service. They pride themselves in how loyal their employees are, and how
passionate they are towards the company and their products. A>er conducting research and a
careful analysis on the information, finding show major growth in the industry as well as the
continuation of growth regarding the company. Polaris Industries is a recommended takeover
target as it is on of the world’s most prominent designers and manufactures of motor sport / all-
terrain vehicles. Acquiring Polaris Industries would successfully and safely diversify risks
currently associated with Catalytic Concrete Company as well as reap other positive bene7ts.
I will remain in contact and am able to listen and answer any questions that may present
themselves until the acquisition decision has been made. With any comments or concerns,
please contact me at: 615-881-2669 or send me an email at ltrujillo2@elon.edu. I greatly
appreciate the opportunity you have given me and hope you 7nd this recommendation helpful.
Sincerely,
Lucas Trujillo
Catalytic Concrete Company
Executive Commi6ee
Table of Contents
Topic Page
Title Page…………………..……………………………………………………………………………………………………….………i
Leer of Transmial……………………………..………………………………………………...……………………..……….. ii
Execu$ve Summary……………………………………………………………………………………………………….…………iii
Introduc$on……………………………………………………………………………………………………………….…………….iv
Company History……………………………………………….………………………………………………………………..……1
Industry description………………………………………………………….…………………………………………….……….1
Company Strategies and Vision……………………………………..………………………………………………………….2
Marke$ng Mix…………………………………………………………………………………………………………….……….…2,3
competition………………………………………………………………………………………………………..………….………4,5
SWOT Analysis………………………………………………………………………………………..………………….………….…5
Financial Performance……………………………………………………………………………………………………………6,7
Conclusions………………………………………………………………………………………………………………………..……..8
Recommenda$ons……………………………………………………………………………………….……….…………..……..9
Exhibits………………………………………………………………….…………………………………..………..10,11,12,13,14
Works Cited………………………………………………….………………………………………………………….………………
15
List of Exhibits
Exhibit Page
Exhibit I – Market Size…………………..……………………………………………………….………………………………. 10
Exhibit II – Market Info…………………………………..…….…………………………………….……………….…………. 11
Exhibit III – Major Products……………………………………………………………………………..………………………12
Exhibit IV – Compe$tor Info………………………………………………………..………………………………………….13
Exhibit V – Customer Base……………………………………..……………………………………………………………….14
Execu$ve Summary
The contents in this report thoroughly analyze Polaris Industries Inc. as a possible takeover
target of Catalytic Concrete and gives recommendations based on the information found. This
strategic analysis of PII provides evidence as well as specific course of action as requested by
Ms. Minerva Cooper.
specific products, company strategies and industry statistics will be discussed. An in-depth
analysis of the financial performance of the company allow the reader to review the company’s
current economic standing as well as potential growth in regards to the company and its
industry. Each aspect of this report will be taken into account when deciding whether the
company would be a smart takeover.
Due to high cash reserves and low long-term debts, CCC presents a favorable acquisition target.
Traded on the New York Stock Exchange, Polaris Industries is a large, Minnesota-based company
that specializes in the manufacturing of all terrain vehicles such as ATVs, snowmobiles, 4-
wheelers, golf carts, motorcycles, etc.
It is currently known as the largest manufacturer of snowmobiles in the entire world and is also
seen as a major competitor in the all-terrain vehicle industry. They also specialize in the design,
and marketing of some of the world’s most innovative, cu;ng edge recreational and utility
vehicles.
The primary product of Polaris Industries Inc. is the All-Terrain Vehicle. All-terrain vehicles
include oG-road sport vehicles, utility vehicles, ATVs (4-wheelers), on road motorcycles,
snowmobiles, global electric motorcars, commercial vehicles, government vehicles and military
vehicles.
Polaris has had a great deal of success in regards to the American Market and has started
expanding internationally. They now have an array of production oriented, developmental and
distributional hubs all over the world which boosted international sales up 16% in 2014. In
North America alone, Polaris currently has an astounding 1,850 dealers. Polaris also has 1,400
dealers outside of North America.
Polaris products are sold in over 100 countries and in 2014, over 380,000 units were shipped
out worldwide. Company 7nancials have continued to trend upwards, as the industry grows,
presenting its self as a safe yet successful takeover target.
Introduc$on
Background
With high cash reserves and low debt levels, the Catalytic Concrete Company has signi7cantly
increased its value due to its success in international sales initiatives.
Problem Statement
Catalytic Concrete Company is an easy target for takeover due to the company’s reliance on a
single product. Concerned with the long-term success of the company, Ms. Cooper looks for
possible targets that would boost the company’s long-term interdependence and lessen their
cash reserves.
Purpose of Report
The purpose of this report is to explore Polaris Industries Inc. and decided whether or not it is a
possible takeover target.
Signi>cance
Acquiring an unrelated company would foster future pro7ts for CCC, decreases the dependency
of one company, and decreases CCC’s cash reserves.
Scope
All information in this report is up to date and current. Not all information regarding Polaris
could be included in this report due to length requirements, however all the necessary and
essential information needed to formulate an educated recommendation is included.
Organiza$on
Featured in the report is vital information regarding the company’s background, industry
description, products, market mix, customer base, competitors, strengths, weaknesses,
opportunities, threats and a financial performance analysis, followed by a well thought out
recommendation.
Company History
Starting oG as a small Minnesota machine shop, David Johnson, Allan and Edgar He6een
manufactured and sold their 7rst “powered sled” (snowmobile) in 1954. With great success, the
team was able to produce 7ve more machines that winter, and they were all sold for less than
eight hundred dollars. Their manufacturing process became more e9cient and during the
winter of 1956 to 1957, seventy-7ve were manufactured, and more than 300 were created in
1957 to 1958. 1960 is when the sport of snowmobiling was on the rise, but in 1964, the
company’s hopes for survival were at stake due to production failures in the 1964 model. By the
mid to late 1960s, the industry was booming and Polaris was bought by to another company
called Textron. Being a more diversi7ed company in regards to all terrain vehicles, Textron put a
lot of eGort into researching water and dry land auto motives. In the late 1970s, the
“snowmobile boom” started to slowly diminish and by the early 80s, Textron was looking to
leave the snowmobile industry behind in hopes to pursue something much larger.
In 1981, management bought out the company due to a decrease in sales due to seasonal/
winter weather related issues, and Polaris Industries Inc. was o9cially created. In 1985, they
begin making ATVs, and in the early 90s, they begin manufacturing their own personal
watercra>s. By 1995, Polaris Industries Inc.’s profits passed the billion mark as they continued to
progress in the vehicles they produced. A state of the air motorcycle line, called Victory
