Medina-based Polaris Industries, Inc., has agreed to sell its metal stamping equipment to Kapco, Inc.-a move that could spell good news for some of the 484 employees at Polaris' soon-to-close plant in Osceola, Wisconsin.

In addition to purchasing equipment from Polaris, Grafton, Wisconsin-based Kapco has signed a three-year deal under which it will become one of Polaris' largest suppliers and lease up to 60,000 feet of space at its Osceola plant. Financial terms of the agreement were not disclosed.

Polaris' deal with Kapco will close March 1, and Kapco aims to have 50 to 70 employees at the plant by that time, Kapco spokesman Neil Willenson told Twin Cities Business on Tuesday morning.

Kapco is a metal stamping company-although Willenson said that its capabilities also include fabrication, die making, welding, and assembles. Under the agreement with Polaris, Kapco will supply components for a variety of Polaris vehicles, including ATVs, motorcycles, and snowmobiles.

Polaris has long been one of the major employers in Osceola, a city of about 2,600, but in May it announced plans to close its Osceola plant and open a new plant this year in an area near Monterrey, Mexico, as part of a company-wide realignment.

Polaris spokeswoman Marlys Knutson said Tuesday that the first round of layoff notices were sent to employees-72 in total-at the Osceola plant between March 1 and 14. Remaining employees will receive notices throughout the year, and Polaris will fully cease operations there by the end of 2011.

Initially, Polaris will be Kapco's only client at the Osceola facility. But “our hope is to work with a variety of Twin Cities businesses to develop a customer base in that area as well,” Willenson said, adding that Kapco's sales team will reach out to metro-area businesses “semi-aggressively” over the next six months to a year.

Kapco currently operates solely in Grafton, where it employs about 260. The company plans to expand its work force there by about 30 employees in addition to hiring in Osceola.

Willenson said that he, Kapco President Jim Kacmarcik, and several other Kapco employees visited Polaris' Osceola plant last month and spoke with employees on all three shifts.

In a written survey, 80 percent of the plant's employees indicated that they plan to apply for a job with Kapco. Kapco is now accepting job applications from both Polaris employees and the general public and has already received at least 70, according to Willenson.

All interested Polaris employees will have a face-to-face interview for the open positions between January 11 and 13. Kapco also has planned a job fair for members of the public who are interested in the positions; it will run from 8 a.m. to 8 p.m. January 11 at Trollhaugen Convention Center in Dresser, Wisconsin.

Offer letters for Kapco's Osceola jobs will be sent out in late January or early February, Willenson said.

Polaris is among Minnesota's 30-largest public companies based on revenue, but it-like many other manufacturers-suffered amid the recession. Its 2009 revenue totaled $1.57 billion, representing about a 20 percent decrease from 2008.