Toro buys Ditch Witch
The parent company of Ditch Witch, a Perry-based manufacturer of underground construction machines, has been sold to Toro Company.
Toro will pay $700 million for the privately held Charles Machine Works Inc., whose products include Ditch Witch and other brands. The deal, which includes a combination of cash on hand and debt, is expected to be completed before the end of the third quarter of fiscal year 2019, Toro said. A spokesman said operations will remain in Perry and become Toro's largest manufacturing facility.
Toro builds and sells equipment for turf maintenance, snow and ice management, landscape, rental and specialty construction, as well as lighting and irrigation. It had $2.6 billion in sales last year. The $700 million purchase price is about eight times what Charles Machine Works earned in 2018 before interest, tax, depreciation and amortization, Toro said.
“Our success is the result of years of hard work and an unwavering commitment to developing innovative solutions for customers,” Charles Machine Works CEO Rick Johnson said. “From
developing the world's first service line trencher in Perry, Oklahoma, to today's robust Ditch Witch dealer network, our family of companies is well-positioned to join The Toro Company's family of brands.”
Charles Machine Works employs more than 1,600 people in Perry and another 500 elsewhere. Ditch Witch is manufactured at the company's 240-acre property.
Toro shares were trading at nearly 2 percent higher on Friday morning.
Charles Machine Works began as an offshoot of a blacksmith operation founded in 1902 and oil-field support business managed by two brothers, Charles and Gus Malzahn. Charles' son Ed launched the company after receiving a mechanical engineering degree, believing the family needed to move away from the service business and into manufacturing.
Ed died in 2015 at the age of 94; in an obituary, The Oklahoman wrote that he got the idea for an underground drilling machine when a plumber friend said it would make his life easier if Malzahn could develop a product that would dig a ditch from a house to the curb.
A modern successor to that first machine invented in 1949 was showcased on the White House lawn seven decades later, representing Oklahoma during “Made in America” week.
Charles Machine Works Executive Chairman Tiffany Sewell-Howard, Ed's granddaughter, said the company put Perry on the map.
“He worked tirelessly to build a company known for supporting Perry, providing good jobs for employees and offering business opportunities to a worldwide dealer network,” Sewell-Howard said. “A large portion of proceeds from this acquisition will be dedicated to honoring my grandfather's legacy through a long-term financial gift benefiting the Perry community. In turn, Perry will become home to Toro's largest manufacturing facility in the world providing expanded job opportunities for a talented, dedicated workforce … a win-win for all.”