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Toro Co., TCF Inventory Finance Form Joint Venture to Provide Channel Financing
Red Iron Acceptance LLC formed to provide expanded financing capabilities, improves Toro's working capital position, officials say.
BLOOMINGTON, Minn. — The Toro Co. (NYSE: TTC) announced the creation of a new joint venture with TCF Inventory Finance, Inc. (TCFIF), an indirect subsidiary of TCF Financial Corporation (NYSE: TCB).
Under the name Red Iron Acceptance, the new commercial finance entity, will provide U.S. distributors and dealers and select Canadian distributors of the Toro and Exmark brands with a reliable, cost-effective source of floor plan and open account financing.
In conjunction with the joint venture TCFIF's affiliate, TCF Commercial Finance Canada, Inc., will provide floor plan and open account financing to dealers located in Canada.
"Ready access to cost-effective financing remains at the forefront of our customers' concerns," said Mike Hoffman, chairman and CEO of The Toro Co. "This venture leverages the complementary strengths of two great companies to offer our channel partners the inventory financing they need to support their businesses. For Toro, it further enables us to free up working capital to drive future growth and innovation, and deliver increased shareholder value."
"The lawn and garden industry is a key area that we have targeted in our growth plan," said William A. Cooper, chairman and CEO of TCF Financial Corp. "This alliance, with an industry leader like Toro, further demonstrates our commitment to the industry."
Customer support services for Red Iron Acceptance will be located at Toro's Bloomington, Minnesota, headquarters with "back office" operations housed at TCFIF's offices in Hoffman Estates, Illinois. Leadership for the new entity will be provided by Tom Evans, who will serve as general manager.
Evans has extensive experience in the inventory finance business, most recently as senior relationship manager for GE Commercial Distribution Finance. Executive oversight for Red Iron Acceptance will be provided by a management committee comprised of four executives from each of The Toro Company and TCFIF.
Currently, commercial inventory financing is offered to Toro and Exmark distributors and dealers through the Toro Credit Company and a third party financing company. Later this year, Red Iron Acceptance is expected to replace the current floor plan financing provided by both parties. The new entity will service nearly 3,500 channel partners serving the golf, sports field, municipal, landscape contractor and residential markets.
