Polaris Industries has completed the acquisition of TransAmerican Auto Parts (TAP), a manufacturer, distributor and retailer of off-road jeep and truck after market accessories for $665m.
Polaris expects the TAP acquisition to contribute approximately $100m to the Company’s fourth quarter 2016 sales and anticipates acquisition costs and purchase price accounting associated with the acquisition of TAP to result in a negative impact to fourth quarter 2016 net income of $15m to $20m, or $0.23 to $0.31 per diluted share.
Excluding the effects of the TAP sales contribution and purchase accounting/acquisition costs, the Company’s earnings guidance for the full year 2016 remains unchanged from its previously provided $3.40 to $3.60 per diluted share with sales expected to be down in the mid- to high-single digit percent range.
The Company continues to anticipate the TAP transaction will be accretive to Polaris’ earnings per share, excluding acquisition and purchase price accounting costs, for the full year 2017.
Polaris will provide full year 2017 guidance that includes the impact of the TAP transaction when the Company reports fourth quarter and full year 2016 results.
The Company expects meaningful annual cost savings within three years following closing, primarily from efficiencies related to procurement, distribution, and expanded product offerings.
As previously announced, TAP will initially operate as a distinct business unit reporting to Polaris Parts, Garments and Accessories president Steve Eastman.
