During his opening remarks to analysts attending Titan Machinery Investor Day in New York’s NASDAQ building on December 12, 2017, David Meyer, Titan Machinery’s CEO, explains the advantages that publicly held companies enjoy in the fragmented dealer industry. Following is that portion of his presentation, in his own words.
“Family-owned equipment dealerships have traditionally been a solid business model and a core main street business. Titan Machinery has taken the solid business model of financially successful businesses, consolidated it, created scale, added appropriate amounts of capital, professional management and succession. Titan Machinery is the only U.S.-based equipment dealer in the public markets today. We’ve had a successful track record in both the equity markets and debt markets.
“Unlike many family-owned dealer groups, Titan Machinery has the permanent capital that actually survives the generations. You look at a family-owned business -- the heirs, the inheritance taxes and they have to split up the net worth between the family members. It's difficult at times and challenging how you move out through the generations. More important is that gene pool. The ability to buy and sell off road, heavy duty construction and ag equipment doesn't necessarily follow that gene pool through the second and third generations.
“There's been many attempts to try and marry private equity with dealership consolidation. Really, that has not been successful. Our position as a public company, not only provides career paths for real talent in the industry, but also from the equity capital and debt capital, puts us in a good position only for the years to come.”