| RDO Equipment Co. | |||
| Ticker: | RDO | 2829 South University Drive | |
| Exchange: | New York Stock Exchange | Fargo, ND 58109 | |
| Industry: | Wholesale (SIC Code 5082) | (701) 237-6062 | |
| Type of Shares: | Class A Common Shares | Filing Date: | 10/2/96 | |
| U.S. Shares: | 4,200,000 | Offer Date: | 1/23/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $14.00 - $17.00 | |
| Primary Shares: | 4,200,000 | Offer Price: | $15.50 | |
| Secondary Shares: | 0 | Gross Spread: | $1.09 | |
| Offering Amount: | $65,100,000 | Selling: | $0.62 | |
| Expenses: | $1,000,000 | Reallowance: | $0.10 | |
| Shares Out After: | 12,550,000 |
| Manager | Tier | Phone |
| CS First Boston | Lead Manager | (212) 325-2000 |
| Dain Bosworth Incorporated | Co-manager | (612) 371-2818 |
| Issuer's Law Firm: | Oppenheimer Wolff & Donnelly |
| Bank's Law Firm: | McDermott, Will & Emery |
| Auditor: | Arthur Andersen |
| Registrar/Transfer Agent: | Norwest Bank of Minnesota |
Dollar amounts in U.S. millions except for per share data | |||||
| 9 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 1/31/96 | 10/31/96 | 10/31/95 | 10/31/96 | ||
| Revenue: | $223.56 | $229.26 | $176.82 | Assets: | $176.71 |
| Net Income: | $4.84 | $5.90 | $4.59 | Curr Assets: | |
| EPS: | $0.51 | $0.63 | Liabilities: | $142.43 | |
| Prior EPS: | $5.99 | $8.91 | Curr Liabilities: | ||
| Cash Flow/Oper: | $12.10 | Equity: | $34.28 | ||
| Cash Flow/Fin: | Cash: | ||||
| Cash Flow/Inv: | |||||
| Business Description |
| The company owns and operates the largest networks of John Deere industrial stores and agricultural stores in the United States. Through its 35 stores, the company sells, rents, and services industrial and agricultural equipment, primarily supplied by Deere & Company and its subsidiaries. The company's revenues have grown at a compound annual rate of 33% over the past five years, from $71.2 million in fiscal 1992 to $223.6 million in fiscal 1996. Management estimates that U.S. retail sales of new industrial equipment in its target product market in calendar 1995 totaled approximately $7.4 billion. Deere is one of the leading suppliers of industrial equipment in the United States for light to medium applications and offers a broad array of products. Currently, Deere has approximately 110 industrial dealers which operate approximately 355 stores in the United States. Each dealer within the Deere industrial system is assigned specific geographic areas of responsibility within which it has the right to sell new Deere products. |
| Competition |
| The company's industrial equipment stores compete with distributors of equipment produced by manufacturers other than Deere, including Case, Caterpillar, and Komatsu. The company also faces competition from distributors of manufactures of specific types of industrial equipment, including JCB backshoes, Kobelco excavators, Komatsu wheel loaders and crawler dozers,a nd Bobcat skid loaders. The company's agricultural equipment stores compete with distributors of equipment from suppliers other than Deere, including Agco, Case, and New Holland. |
| Business Plan |
| In order to capitalize on industry consolidation trends, expand its market leadership position, and further develop its industrial nd agricultural equipment operations, the company has developed its growth strategy, the key elements of which are: 1) increasing market share; 2) pursuing additional acquisitions; 3) implementing the RDO operating model; 4) capitalizing on diversity of operations. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used i) to pay the purchase price or repay indebtedness incurred to finance recent or pending acquisitions ii) to make an S Corporation distribution to the company's existing stockholders in connection with termination of the company's S Corporation status and iii) for general corporate purposes and potential acquisitions. |