Source: Titan Machinery press release
WEST FARGO, ND– Titan Machinery Inc. (Nasdaq: TITN), a leading network of full-service agricultural and construction equipment stores, today announced that it has entered into definitive purchase agreements to acquire Heartland Ag Systems, Heartland Solutions and their subsidiaries (“Heartland”), the largest Case IH Application Equipment dealership in North America providing application-focused solutions for commercial applicators, for a total of $110 million, subject to final working capital and other closing adjustments (the “Transaction”).
The consideration for the transaction will consist primarily of cash on the balance sheet. During the fiscal year ended December 31, 2021, Heartland generated revenue of $213.9 million and EBITDA of $15.3 million.
Heartland Ag Systems dates back to 1966 and is the largest distributor of Case IH application equipment in North America and one of the leading national distributors of sprayer parts and accessories. Heartland has exclusive distribution agreements in 17 states across the Midwest and Northwest, supported by 12 retail stores, six of which are within Titan Machinery’s existing agricultural footprint, as well as manufacturing agricultural equipment and implements. related business applications at their headquarters in Hutchinson, MN.
Heartland is well-diversified with a strong parts and service business that represents approximately 30% of full-year 2021 revenue and generated pre-tax margins of 4.2%, presenting a similar profile to the existing business of Titan Machinery.
David Meyer, President and CEO of Titan Machinery, said, “We are proud to announce today our definitive agreement to acquire Heartland Ag Systems. This transaction is significant for Titan Machinery, both in size and strategic fit. Most importantly, it gives Titan Machinery access to the full line of Case IH application equipment products, including self-propelled sprayers and fertilizer spreaders, as well as additional sales opportunities to combine tractors , tillage and construction equipment to commercial application customer.
The increased parts, service and technical capabilities we bring to commercial application customers in our highly productive base agricultural footprint, combined with the long-term business relationships Heartland has developed with commercial application customers, will be a winner. /winner for Titan Machinery, Heartland, Case IH and the hundreds of business application vendors in our core markets.
Mr. Meyer added, “Titan Machinery is uniquely able to integrate these two industry-leading companies, creating a complete distribution model of this scale – spanning both farmer and commercial applicator – with our expansive footprint in the Upper Midwest region, a high level of customer service and commitment to operational excellence.
“We expect immediate revenue synergies to be captured in the first full year of operations, and we expect to generate additional growth and margin expansion as we enhance our combined network. We are delighted to add Heartland’s experienced management team and we look forward to a bright future together as we welcome the entire Heartland organization to the Titan Machinery family.
Strategic and Financial Highlights
Expanded Market Opportunity Through Access to Commercial Application Market – Strategically provides Titan Machinery with access to Case IH’s full line of application equipment (ie.
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