Cycle Country Accessories Announces Sale of Its ATV Accessories Division for $9.7M
Cycle Country Accessories Corp. (NYSE: ATC) announced today that it is selling its ATV Accessories product line to Kolpin Outdoors Inc. of Fox Lake, WI, for $9.7 million, subject to certain adjustments and contingencies.
At the closing, $3.2 million will be paid to the Company in cash. An additional $1,000,000 will be paid in three installments, on October 1, 2011, January 12, 2012 and April 1, 2012, subject to Kolpin's right to offset certain claims against such amount. The purchase price may also be increased or decreased to the extent the value of the finished goods of the product line inventory changes prior to closing.
The balance of $5.5 million will be paid over three years based on an earn-out provision, under which the Company will receive a percentage of net sales for the three one-year periods following closing. Since these payments will depend on Kolpin's net sales for the periods specified, we cannot predict with certainty the amount of the payments, if any, to which Company will be entitled under this provision.
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