Polaris Industries Inc. has entered into an agreement to acquire Transamerican Auto Parts Co. (TAP), a privately held, vertically integrated manufacturer, distributor, retailer and installer of off-road Jeep and truck accessories, for an aggregate consideration of $665 million, subject to customary closing adjustments. After adjusting for the $115 million estimated net present value of future tax benefits, the purchase price implies a multiple of approximately 9.0 times TAP’s EBITDA for the 12 months ended Sept. 30, 2016.

TAP is a leader in the highly fragmented and growing $10-plus billion Jeep and truck accessory market. TAP sells and installs an extensive line of accessories for Jeep and truck enthusiasts, including products manufactured under its seven proprietary aftermarket brands: PRO COMP, RUBICON EXPRESS, SMITTYBILT, POISON SPYDER, G2, LRG and TRAIL MASTER. TAP is one of the largest retailers and installers in the North American market, selling through its own retail and online network while also supporting numerous independent accessory retailers/installers. For the past 12 months ended Sept. 30, 2016, TAP generated approximately $740 million in sales, and from 2012 through 2015, achieved compound annual sales growth of 15 percent and compound annual EBITDA growth of 17 percent.

“We are excited to add TAP’s market-leading, multi-channel business, proprietary brands, proven management team and experienced employees to the Polaris portfolio,” said Polaris Chairman and CEO Scott Wine. “This transaction is consistent with our long-term strategy, provides us an immediate leadership position in a growing market, and allows us to accelerate Polaris’ growth and profitability. TAP’s products and services for customers in the off-road four-wheel-drive market correspond closely to our Off-Road Vehicle business. Further, by broadening TAP’s proprietary product lines, expanding its retail and distribution footprint, where appropriate, and cross-selling both companies’ extensive product offerings to a large combined installed base, we believe we will create significant value for our stakeholders. Our similar cultures, centered on innovative brands and performance, make TAP a great addition to Polaris’ expanding portfolio.”

“Over the past 55 years, our employees have built a company that prides itself on serving our customers with quality products at competitive prices,” said Greg Adler, TAP’s president and CEO. “We see tremendous opportunity for further growth as we become an integral part of the Polaris organization. Combining TAP with Polaris’ aftermarket brand portfolio facilitates significant synergies, while Polaris’ financial resources provide the backing we need to pursue a variety of growth prospects we have identified across the organization.”