- Transformational transaction creates an industry leading global
mixed-fleet Precision Ag platform
- Enhances AGCO’s comprehensive technology offering around
guidance, autonomy, precision spraying, connected farming, data
management and sustainability
- AGCO’s combined Precision Ag revenue now expected to exceed
$2.0 billion by 2028
- Transaction is expected to be accretive to AGCO’s revenue
growth, operating margin profile and earnings per share in the
first full year post-close
- AGCO’s Grain & Protein business to be placed under
strategic review
AGCO Corporation (NYSE: AGCO), a worldwide manufacturer and
distributor of agricultural machinery and Precision Ag technology,
announced it has entered into a Joint Venture (JV) with Trimble
(Nasdaq: TRMB), where AGCO will acquire an 85% interest in
Trimble’s portfolio of Ag assets and technologies for cash
consideration of $2.0 billion and the contribution of JCA
Technologies.
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The JV creates a global leading mixed-fleet Precision Ag
platform that will be the exclusive provider of Trimble Ag’s
comprehensive technology offering, supporting the future
development and distribution of next-generation Ag technologies.
Trimble Ag offers a wide variety of user-friendly technologies
compatible across brands, equipment models and farm types. Its
hardware, software solutions and cloud-based applications span all
aspects of the crop cycle, from land preparation to planting and
seeding to harvest.
“This landmark transaction creates a JV that becomes the premier
mixed-fleet Precision Ag business in the world and accelerates
AGCO’s strategic transformation,” said Eric Hansotia, AGCO’s
Chairman, President and Chief Executive Officer. “This deal
significantly enhances AGCO’s technology stack with disruptive
technologies that cover every aspect of the crop cycle, which
ultimately helps us better serve farmers no matter what brand they
use.”
The JV will complement and enhance AGCO’s existing Precision Ag
portfolio to deliver even more industry leading solutions across
the crop cycle while supporting over 10,000 equipment models. By
combining these two Precision Ag portfolios and leveraging
multi-channel access across Trimble Ag, AGCO OEM & Aftermarket,
other OEMs, and Precision Planting dealers, the JV will be
positioned to drive outsized growth and better provide
next-generation technologies to even more farmers around the
world.
Hansotia continued, “The exclusive access to Trimble Ag
products, combined with AGCO’s existing Precision Ag offerings also
accelerates AGCO’s growth ambitions around autonomy, precision
spraying, connected farming, data management and sustainability.
All of these touchpoints will result in us being even more farmer
focused."
Commercial synergies resulting from direct access to AGCO’s
global OEM, aftermarket, other OEM, and retrofit channels, in
addition to modest run-rate cost synergies are expected to
approximately double the JV’s EBITDA by year 5 post closing.
"Farmers today are looking for mixed fleet solutions across
their tractors and the implements that they use to most efficiently
and sustainably feed the world," said Rob Painter, CEO of Trimble.
"We believe a joint venture with AGCO, complemented by the
successful mixed fleet approach that they have developed with their
Precision Planting business model, can help us better serve farmers
and OEMs together.”
The $2.0 billion purchase price for AGCO’s 85% ownership in the
Trimble Ag business represents an implied enterprise value of
approximately $2.35 billion and implies a transaction multiple of
approximately 13.8x based on 2023E EBITDA of approximately $170
million. Inclusive of estimated revenue and run-rate cost synergies
of $100 million by year 3 and the net present value of tax
attributes in excess of $50 million, the synergized multiple is
approximately 8.5x on a 2023E basis.
The transaction is not subject to a financing condition. AGCO
has secured $2.0 billion in fully committed bridge financing from
Morgan Stanley Senior Funding, Inc. The purchase price of $2.0
billion is expected to be funded by a combination of existing
liquidity, free cash flow generation and new debt. AGCO remains
committed to maintaining its solid investment grade credit
rating.
Closing is expected in the first half of 2024, subject to the
satisfaction of regulatory approval and customary closing
conditions.
AGCO has also announced that the Grain & Protein business
will be placed under strategic review as part of AGCO’s broader
portfolio transformation. Under this review, AGCO will assess all
strategic options to ensure the Grain & Protein customers are
serviced in the best way possible, and that the business is best
positioned to maximize its full potential.
Morgan Stanley & Co. LLC is acting as exclusive financial
advisor to AGCO. Simpson Thacher & Bartlett LLP is acting as
legal advisor to AGCO, and Troutman Pepper Hamilton Sanders LLP is
acting as its financing counsel.
Centerview Partners LLC is acting as exclusive financial advisor
to Trimble, and Skadden, Arps, Slate, Meagher & Flom LLP is
acting as its legal advisor.
Conference Call / Webcast
AGCO will host a conference call to discuss the acquisition at
11:30 AM ET today.
Date: September 28, 2023
Time: 11:30 AM ET
Link to listen:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=k1eQD8uv
Cautionary Statements Regarding Forward-Looking
Information
Forward-looking statements in this presentation, including
statements about the transaction and our strategic plans as well as
synergies, growth in revenue and EBITDA, accretion of the
transaction to growth, margin and earnings, and our ability to
close the transaction and the timing of the closing, are subject to
risks that could cause actual results to differ materially from
those suggested by the statements. These risks include, but are not
limited to, adverse developments in the agricultural industry,
including those resulting from COVID-19, supply chain disruption,
inflation, weather, commodity prices, changes in product demand,
interruptions in supply of parts and products, difficulties in
integrating the Trimble Ag businesses in a manner that produces the
expected financial results, reactions by customers and competitors
to the transaction, including the rate at which Trimble Ag’s
largest OEM customer reduces purchases of Trimble Ag equipment and
the rate of replacement by the Joint Venture of those sales, and
adverse changes in the financial and foreign exchange markets,
including increases in interest rates. Actual results could differ
materially from those suggested in these statements. Further
information concerning these and other risks is included in AGCO’s
filings with the SEC, including its Form 10-K for the year ended
December 31, 2022 and subsequent Form 10-Q filings. AGCO disclaims
any obligation to update any forward-looking statements except as
required by law.
About AGCO
AGCO (NYSE: AGCO) is a global leader in the design, manufacture
and distribution of agricultural machinery and precision ag
technology. AGCO delivers customer value through its differentiated
brand portfolio including core brands like Fendt®, GSI®, Massey
Ferguson®, Precision Planting® and Valtra®. Powered by Fuse® smart
farming solutions, AGCO’s full line of equipment and services help
farmers sustainably feed our world. Founded in 1990 and
headquartered in Duluth, Georgia, USA, AGCO had net sales of $12.7
billion in 2022. For more information, visit www.AGCOcorp.com. For
company news, information and events, please follow us on Twitter:
@AGCOCorp. For financial news on Twitter, please follow the hashtag
#AGCOIR. For more information, please visit our website at
www.agcocorp.com.
About JCA Technologies
JCA Technologies is a leader in the emerging area of autonomous
agricultural machine systems. JCA’s industry-leading autonomous
tech stack, the JCA Autonomous Framework, has been shaped through
more than 20 years of delivering scalable advanced technology
solutions for agricultural OEMs, while complementing with
engineering and manufacturing expertise. Since the acquisition of
JCA by AGCO in May of 2022, JCA has applied its technology and
engineering capabilities to retrofit autonomy solutions as part of
AGCO’s retrofit-first strategy. JCA is headquartered in Winnipeg,
Manitoba, Canada, and serves customers all over the world. For more
information, please visit our website at
www.jcatechnologies.com.
About Trimble
Dedicated to the world's tomorrow, Trimble is a technology
company delivering solutions that enable our customers to work in
new ways to measure, build, grow and move goods for a better
quality of life. Core technologies in positioning, modeling,
connectivity and data analytics connect the digital and physical
worlds to improve productivity, quality, safety, transparency and
sustainability. From purpose-built products and enterprise
lifecycle solutions to industry cloud services, Trimble is
transforming critical industries such as construction, geospatial,
agriculture and transportation to power an interconnected world of
work. For more information, please visit our website at:
www.trimble.com.
About Trimble’s Agriculture Division
Trimble’s Agriculture Division provides solutions that solve
complex technology challenges across the entire agricultural supply
chain. The solutions enable farmers and advisors to allocate scarce
resources to produce a safe, reliable food supply in a profitable
and environmentally sustainable manner. Covering all seasons,
crops, terrains and farm sizes, Trimble solutions can be used on
most equipment on the farm, regardless of manufacturer. To enable
better decision making, Trimble offers technology integration that
allows farmers to collect, share, and manage information across
their farm, while providing improved operating efficiencies in the
agricultural value chain. Trimble solutions include guidance and
steering, desktop and cloud-based data management, flow and
application control, water management, harvest solutions and
positioning services. For more information, please visit our
website at: www.trimble.com/agriculture.
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version on businesswire.com: https://www.businesswire.com/news/home/20230927470614/en/
AGCO Investor Contact Greg Peterson V.P., Investor
Relations 770-232-8229 greg.peterson@agcocorp.com
AGCO Media Contact Rachel Potts V.P., Chief
Communications Officer 678-654-7719 rachel.potts@agcocorp.com
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