VICTORIAN based farm machinery group O’Connors – which has 16 branches including Mildura and Swan Hill – has sold to American-based Titan Machinery Inc for about $100 million.
A deal expected to be finalised by the end of this year.
Titan operates full-service agricultural and construction equipment stores throughout the US and EU and after a string of its own recent acquisitions, O’Connors has become Australia’s largest Case IH dealership group.
Titan has a market cap of almost $US650 million, with a debt level of about $US345 million, and its share price has taken a battering this year – falling from a high of $US47.76 in March to a low of $US25.57 in May.
It has made small advances since then, closing at $US28.80 yesterday.
With its O’Connors acquisition, Titan says it intends to build its presence in south-eastern Australia and capitalise on global operational synergies.
O’Connors chief executive Gareth Webb said the current O’Connors management team and employees would remain the same.
Mr Webb said it would be “business as usual in our day-to-day operations and our customers remain our number-one priority”.
“Joining the Titan Group will further enhance the customer benefits that come with an expansive network, particularly in the areas of parts availability and technical support as well as product expertise and availability.
“Our customers and staff will have access to knowledge and support from the world’s largest Case IH dealer, bolstering the support already offered.”
The O’Connors story began at Birchip in 1964, when J.J. O’Connor purchased his first International Harvester dealership.
Titan was founded in 1980 and headquartered in West Fargo, North Dakota.
“We are very impressed with the O’Connors senior management team, led by Gareth Webb, who have been operating the business exceptionally well during the past five years after succeeding the retiring major shareholders Dennis and Mark O’Connor,” Titan Machinery chairman and chief executive David Meyer said.
“It’s the strong O’Connors team, along with their great track record of retailing and supporting the high horsepower Case IH product lineup, which makes this a very compelling acquisition.”
Aaron Bett, general manager of Case IH Australia-New Zealand, welcomed the announcement and congratulated the O’Connors executive team on securing a significant development.
“O’Connors has a rich history in Australian agriculture and has built a significant business with an emphasis on the highest level of customer service and support,” Mr Bett said.
“I’d like to recognise Mark and Dennis O’Connor, who have continued to grow the dealer group into a robust and dynamic network that has attracted Titan Machinery to recognise the enormous opportunities in the Australian agriculture market.”
