Titan Machinery (TITN) – 4/18/12
$115 144a senior unsec cb pricing tonight from BAML/WFC. Terms: 7 yr, 3.625-4.125% up 30-35%, nc-3y, s-call thereafter @120%, prot. UOP = working capital & gcp (incl repaying portion of floor plan finance). Titan Machinery sells & rents agricultural & construction machinery in Midwest & Europe. $675 mkt cap stk just off all time highs. Recent results have been good given improving env. 6.3x levered, incl floorplan financing. Highly acquisitive. For 7 yr, we think L+650 is right. See credit color. 2y90d 50/10 ile = 63/48, but ADV is thin 360k. We’ll discount to 33iv. Theo = 102. Small deal. Less than stellar credit & cb structure. Will get done, but we’d push for mids
Sales, service, and rental of agricultural & construction machinery with 106 dealerships in upper Midwest and Europe.
PF cash $80m
PF debt $615m
LTM ebitda $97m
LTM FCF -$204m
Leverage 6.3x
Market cap = $695m
FY13 results very impressive driven by favorable ag env. Ag is 85% sales & benefiting from high farm incomes and commodity prices. Construction mkt improving w/good weather, energy inv in bakken shale & ag-related demand. Co very acq completing 45 acq since jan 03. Have presence in Romania & Bulgaria with 12/11 & 3/23 acq. More acq to come. Other debt decured credit fac & floorplan financing w/$400m avail w/proceeds paydown
L+650