Dealer News Update
Rocky Mountain Dealerships Inc., Calgary-based, has staked its future on being a consolidator, a company that acquires smaller rivals to spur long-term profit growth. The basic idea is simplicity itself: Bigger is usually better.
Rocky Mountain, with operations selling the Case brand of farm and construction equipment in the three Prairie provinces, has been expanding through acquisitions since going public in late 2007, a period over which revenues, boosted by takeovers, have nearly tripled to about $1-billion. Earnings have soared too. In this year’s third quarter alone, profit of $8.5-million nearly equalled the entire $9.9-million it was making in the full year before going public.
Rocky Mountain chief financial officer David Ascott said he expects equipment sales to remain buoyant, driven by increasing wealth on farms because of high crop prices and increasing demand for food caused by global population growth and improving diets.
About 90% of Rocky Mountain’s revenue comes from the agricultural sector and 10% from construction equipment.
Rocky Mountain made two purchases of smaller rivals this year. In November, it completed a deal for an Alberta farm dealership with $20-million in annual revenue and earlier in the year it plucked up another with $54-million in revenue.
Arizona Machinery, Co. is the new name of AA Equipment and Greenline Equipment. They are all part of one company and provide support to their customers in three different geographic territories, the company said.
The company recently decided that these three companies should be recognized as they actually exist; one unified company. The company said, “In our opinion, the clearest way to reflect this is to have them operate under one name, thus the need for a name change. This was an agonizing decision because of the excellent reputation each of these groups have established over many years. There was also the concern of the perception that this is a new ownership group, rest assured, it is not.”
Papé Machinery has acquired the assets of Arrow Machinery in Colfax and Pomeroy, WA, for an undisclosed price. Arrow is the authorized dealer for John Deere Agriculture and Turf equipment, as well as Honda, STIHL, and “several other high-quality manufacturers,” Papé said.
“We are excited about this opportunity to offer John Deere Agriculture and Turf equipment to more customers in Eastern Washington,” Papé Machinery President Rodger Spears said in a written statement.
With the addition of Arrow Machinery, Papé Machinery now serves agricultural and turf customers from eight locations in Eastern Washington and Northern Idaho, and seven locations throughout Western Oregon, the company said.
In September, Papé Machinery announced it had acquired Fisher Farm & Lawn, more than doubling Pape’s John Deere sales territory. Fisher President Patrick Richards noted at the time that Papé has acquired six other John Deere Agriculture and Turf dealerships since November 2011 and had plans to continue aggressively expanding in that market.