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What: Shares of Arctic Cat
So what: Arctic Cat will buy back the 33% stake that Suzuki owns for $79.3 million, a $13-per-share price. The deal will reduce shares outstanding to 12.3 million, from 18.4 million, and will leave the company with $60 million in cash after the purchase.
Now what: This certainly looks like a sweetheart deal for shareholders, with shares now trading over $22 per share. The stock is now trading at new 52-week highs, momentum that I think can continue now that the company is free of Suzuki. The current P/E ratio of 22.5 will also come down as analysts update the lower share count as a result of this deal.
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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.
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