David Johnson, Edgar Hetteen, and Allan Hetteen were partners in Hetteen Hoist and Derrick Shop in Roseau, Minnesota. They designed and built a machine in 1954 to travel over snow. This company eventually became known as Polaris Industries. Edgar left the company in June 1960 and started Polar Manufacturing in Thief River Falls. The company name later changed to Arctic Enterprises.
Arctic Enterprises began producing Arctic Cat snowmobiles in 1960. They later expanded to purchase boat manufacturers such as Spirit Marine, Silver Line, Larson, and Lund. Spirit Marine produced the first Wetbike in 1978.
A snowless winter in 1980 and over-production forced Arctic Enterprises to scale back operations and close their boat manufacturing subsidiaries. Arctic Enterprises went bankrupt in 1981 and ceased production in 1982. In 1984, a new startup company was formed, called Arctco, to continue production of the Arctic Cat snowmobile line. In 1996, the company officially changed its name to Arctic Cat.