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Agrimarketing : March 2009
COVER STORY/continued frompage 35 lic companywhere you actually raise capital for a purpose and manage that capital to support the business, it’s permanent capital. It adds to the stability and resources to run a quality business.” RDO Equipment Co. became a public company in January 1997. Shortly thereafter, the company acquired its largest number of dealerships to date: 28. But that growthwasmore than the company could sustain at that time, and six years later, the com- panywent private again. “In the late ’90s,we grewway faster than our ability to pro- vide the leadership thatwe needed tomake those stores success- ful,” Kreps says. “Somaybe at one timewewere going down the path to be the largest John Deere dealer,but todaywe really just want to be the best.” He says the company stillmaintainsmany of the practices required of a public company,such as internal audits. But the company also can nowfocus on its long-termvision instead of focusing on the next quarter’s investment numbers. WHAT THE FUTURE HOLDS The equipment business has always been a solid industry and for Titan, the general recession has yet to have a significant impact on sales.Meyer attributes the stability to the diversification of construction and ag equipment offered in his stores.He says it’s a cyclical business:when one industry is at the bottomof the cycle, the other is at the top. “In addition, the parts and service component differentiates us fromthe equipmentmanufacturer,”Meyer says. There has been a lot of hype over the volatility of commodity prices lately.What everyone needs to knowis the farmland all gets planted and harvested every year.Equipment gets replaced, repaired and serviced under normal use schedules. This gives dealers consistent business in all economic cycles. Meyer thinks the stage is set for yetmore growth in the industry. “I thinkwe’re on the front edge of amajor consolidation in this industry,”Meyer says. “If you look at the demographics of the dealer organization, there’s going to continue to be consolida- tion. Factors including capital, lack of succession, sophistication, age—all of these are going to contribute to a lot of consolidation that’s going to take place during the next 10 years.” And though RDO Equipment Co. is not growing at the same rate it did in the ’90s, the company continues to expand and be profitable. “We just finished our fiscal year on January 31 and on the ag sidewe had the best year that our company has ever had and all indications look like next yearwill be as strong. There certainly is a lot of fear out there, I think, among farmers and lenders and equipmentmanufacturers and dealers aboutwhat next year looks like,” Kreps says. “Butwe believewe have a strong future.” He says he foresees some expansion opportunities coming in the next two to five years, namelywith dealerswho have consol- idated or sold and are struggling to find their economy of scale. “We see growth in our future.We need to growto provide our employees upwardmobility and the opportunity to advance, but there’s a lot of organic growthwithin our existing footprint,” Kreps says. AM Tammy Dodderidge is a freelancewriter based in Lenexa, KS. She can be contacted at email@example.com 36 AgriMarketing s March 2009 TITANMACHINERY INC. Public Company Founded: 1980 Employees: 1,272 Number of Stores: 63 Headquarters: Fargo,ND Major Lines: CaseIHAg, Case Construction,New HollandAg andNewHolland Construction. 2002-2003: Meyer Equipment and CI FarmPower merge to become TitanMachinery Inc. Company acquires construction equip- ment stores for a 13-store base. 2004: Acquires three locations inMN. 2005: Acquires or opens sevenmore stores in IA and SD. 2006: Acquires or opens sixmore stores in MNand SD. 2007: Acquires or opens eight stores inND, SD andMN. Company goes public and is listed on the NASDAQ. 2008: Acquires or opens its highest number of stores to date, 24, in IA,MN,NE, SD,ND, MT andWY. 2009: TitanMachinery upgraded toNASDAQ Global Select. AM RDOEQUIPMENT COMPANY Private Company Founded: 1968 Employees: 1,600 Number of Stores: 54 Headquarters: Fargo,ND Major Lines: John Deere farmand construction equipment, and Vermeer,Hitachi, and Sakai equipment. 1968: RonaldD.Offutt buys ag equipment store in Casselton,ND. 1976-1988: Acquires or opens eight ag stores inND, SD andMN. 1989: Enters the construction equipment busi- ness,with its first four stores inND. 1990: Acquires three construction stores inMN. 1991-1999: Acquires or opens 28 construction or ag stores inMN, SD,MT,AZ, CA,WAand TX. 1997: Company goes public in January. 2000-2005: Company acquires one ag store in SD, and six Vermeer stores in CA,HI and OR. 2003: Company goes private. 2006: Company opens ag/construction flagship store inMN. 2008: Company acquires one ag store inMN. AM