BLOOMINGTON, Minn.--(BUSINESS WIRE)--The Toro Company (NYSE: TTC) today announced that it has successfully completed its acquisition of privately held The Charles Machine Works, Inc., an Oklahoma corporation and the parent company of Ditch Witch and other leading brands in the underground construction market.
Known as “The Underground Authority,” Charles Machine Works designs, manufactures and sells a range of products to cover the full life-cycle of underground pipe and cable, including horizontal directional drills, walk and ride trenchers, utility loaders, vacuum excavators, asset locators, pipe rehabilitation solutions and after-market tools. The acquisition brings together Toro’s portfolio of leading brands with Charles Machine Works’ deep understanding of the structures and systems that move resources across the globe, and the most important needs of underground construction professionals.
“We’re excited to welcome the men and women of Charles Machine Works to our team,” said Richard M. Olson, Toro’s chairman and chief executive officer. “As an organization, our strategic priorities of profitable growth, operational excellence and empowering people are well aligned. We are confident that together, we will further strengthen our portfolio of market-leading brands, with a focus on our customers, a commitment to innovation and leveraging our best-in-class channel networks. I am very optimistic about the momentum our combined strengths, talents and resources will generate in the future, as we continue our focus on long-term value creation for all of our stakeholders.”
The purchase price was approximately $700 million, which was financed with new debt and borrowing under Toro’s existing credit facility. The transaction, originally announced February 15, 2019, is immediately accretive to EPS, excluding purchase accounting adjustments and transaction-related expenses. As previously communicated, the company expects to realize synergies of about $30 million over a three-year period following the close. In addition, there are also revenue synergies and working capital improvements anticipated over time.
The company expects to provide updated full-year guidance when it reports its fiscal 2019 second quarter results.
About The Toro Company
The Toro Company (NYSE: TTC) is a
leading worldwide provider of innovative solutions for the outdoor
environment including turf maintenance, snow and ice management,
landscape, rental and specialty construction equipment, and irrigation
and outdoor lighting solutions. With sales of $2.6 billion in fiscal
2018, Toro’s global presence extends to more than 125 countries. Through
constant innovation and caring relationships built on trust and
integrity, Toro and its family of brands have built a legacy of
excellence by helping customers care for golf courses, sports fields,
public green spaces, commercial and residential properties and
agricultural operations. For more information, visit www.thetorocompany.com.
About Charles Machine Works
Charles Machine Works is The
Underground Authority—a family of companies delivering the most advanced
equipment and solutions for underground construction and service in the
world today. Its family includes Ditch Witch®, Subsite®
Electronics, DW/TXS®, HammerHead®, Radius®
HDD, American Augers®, Trencor® and MTI®
Equipment. Together, the Charles Machine Works family of companies
offers the most complete line of solutions for the full life-cycle of
underground pipe and cable. For more information, visit https://charlesmachine.works/.
Forward-Looking Statements
This news release contains not
only historical information, but also forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934, and that are subject to the safe
harbor created by those sections. Statements that are not historical are
forward-looking and reflect expectations and assumptions.
Forward-looking statements are based on Toro’s current expectations of
future events, and often can be identified in this release and elsewhere
by using words such as "expect," "strive," "looking ahead," "outlook,"
"guidance," "forecast," "goal," "optimistic," "anticipate," "continue,"
"plan," "estimate," "project," "believe," "should," "could," "will,"
"would," "possible," "may," "likely," "intend," "can," "seek,"
"potential," "pro forma," or the negative thereof and similar
expressions or future dates. Some of the forward-looking statements in
this release about Toro’s acquisition of Charles Machine Works include
Toro’s expected earnings contribution from the acquisition and expected
value to be achieved through synergies and working capital improvements.
Forward-looking statements involve risks and uncertainties that could
cause actual results to differ materially from those projected or
implied. The following are some of the factors known to Toro that could
cause Toro’s actual results to differ materially from what Toro has
anticipated in its forward-looking statements: the failure by Toro to
achieve the net sales, earnings and any cost or revenue synergies and
any working capital improvements expected from the acquisition or delays
in the realization thereof; delays and challenges in integrating the
businesses; business disruption as a result of the completion of the
acquisition; loss of key personnel; unanticipated liabilities or
exposures for which Toro has not been indemnified or may not recover;
infringement of intellectual property rights of others associated with
the rights acquired in the acquisition; and general adverse business,
economic or competitive conditions. For more information regarding these
and other uncertainties and factors that could cause Toro’s actual
results to differ materially from what it has anticipated in its
forward-looking statements or otherwise could materially adversely
affect its business, financial condition or operating results, see
Toro’s most recently filed Annual Report on Form 10-K, Part I, Item 1A,
“Risk Factors” and Quarterly Report on Form 10-Q, Part II, Item IA,
“Risk Factors.” All forward-looking statements included in this release
are expressly qualified in their entirety by the foregoing cautionary
statements. Toro cautions readers not to place undue reliance on any
forward-looking statement which speaks only as of the date made and to
recognize that forward-looking statements are predictions of future
results, which may not occur as anticipated. Actual results could differ
materially from those anticipated in the forward-looking statements and
from historical results, due to the risks and uncertainties described
above, the risks described in Toro’s most recent Annual Report on Form
10-K, Part I, Item 1A, “Risk Factors” and Quarterly Report on Form 10-Q,
Part II, Item IA, “Risk Factors,” as well as others that Toro may
consider immaterial or does not anticipate at this time. The foregoing
risks and uncertainties are not exclusive and further information
concerning Toro and its businesses, including factors that potentially
could materially affect Toro’s financial results or condition, may
emerge from time to time. Toro undertakes no obligation to update
forward-looking statements to reflect actual results or changes in
factors or assumptions affecting such forward-looking statements. Toro
advises you, however, to consult any further disclosures it makes on
related subjects in its future Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, and Current Reports on Form 8-K that Toro may file
with or furnish to the SEC.
