The deal is expected to close by the end of Toro’s fiscal 2019 third quarter, subject to regulatory approvals, the company said in an announcement. Toro will finance the acquisition with $700 million in cash, additional financing arrangements and borrowings under its existing credit facility.
Most of Charles Machine Works’ products serve the underground construction market, but Ditch Witch also offers a line of trenchers and mini skid steers.
“The addition of Charles Machine Works will further strengthen our portfolio of market-leading brands supported by talented employees, a commitment to innovation, a best-in-class dealer network and long-standing customer relationships,” Richard Olson, Toro’s chairman and chief executive officer, said in a statement.
Olson noted the country’s aging infrastructure and the growing market for “next-generation technologies” such as 5G as factors in the decision to acquire the company.
Toro reported first-quarter earnings of $59.5 million, up from $22.6 million year-over-year. If the acquisition closes as expected, Toro anticipates second-quarter earnings per share to increase from 55 cents to between $1.15 and $1.20.
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