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HomePosts Tagged "AGCO Corporation"
Agribusiness, Finance, Foodgrains, North America, Trade

The divestiture of Grain & Protein supports AGCO’s strategic transformation, recently accelerated by the PTx Trimble joint venture, which closed in April 2024.

AGCO Corporation, a global leader in the design, manufacture and distribution of agricultural machinery and precision ag technology, announced it has entered into a definitive agreement to sell the majority of its Grain & Protein business to American Industrial Partners (“AIP”) in an all-cash transaction valued at $700 million, subject to working capital and other customary closing adjustments.

“The divestiture of Grain & Protein supports AGCO’s strategic transformation, recently accelerated by the PTx Trimble joint venture, which closed in April 2024,” said Eric Hansotia, AGCO’s Chairman, President and Chief Executive Officer. “Divesting this business allows us to streamline and sharpen our focus on AGCO’s portfolio of award-winning agricultural machinery and precision ag technology products, which underpins a long-term focus on high growth, high margin and high free cash flow generating businesses.”

“AIP has extensive experience in the industrial sector and vast carve-out expertise, which we believe will unlock new potential for the Grain & Protein business. We believe the move will help ensure its brands continue to lead the market in grain, seed and protein production equipment and remain well-positioned to deliver for farmers,” added Hansotia.

AGCO expects to use the net proceeds from the transaction consistent with its stated capital allocation priorities, including debt repayment, disciplined investment in technology and organic growth initiatives and return of capital to shareholders.

The transaction perimeter to be sold includes the five primary Grain & Protein brands – GSI®, Automated Production® (AP), Cumberland®, Cimbria® and Tecno®. The transaction perimeter to be sold excludes AGCO’s Grain & Protein business in China.

AGCO will begin reporting Grain & Protein as held for sale in the company’s consolidated financial statements for the second quarter of 2024 through the closing date. The company expects to incur a loss on the sale of the business in the range of $450 million to $475 million.

The transaction purchase price implies a transaction multiple of approximately 8.3x based on Grain & Protein’s trailing twelve months adjusted EBITDA as of March 31, 2024.

The transaction is anticipated to close before the end of the year, subject to regulatory approvals and other customary closing conditions.

Morgan Stanley & Co. LLC and Rabo Securities USA, Inc. are acting as financial advisors to AGCO. Simpson Thacher & Bartlett LLP is acting as legal advisor to AGCO. Santander Corporate & Investment Banking is acting as financial advisor to AIP and is leading the fully committed debt financing. Sidley Austin LLP is acting as legal counsel to AIP.

The divestiture of Grain & Protein supports

Agrotech, Digital Technologies, Industry Reports / Analysis, IT

 In the Asia-Pacific region, the precision farming industry is steadily taking root through joint ventures between global agri-tech players and local companies. Let’s explore further.

The Asia-Pacific Precision market is projected to grow at a compound annual growth rate (CAGR) of 16.4 per cent to reach $2.62 billion by 2026, according to a report by Markets and Markets. The increasing use of cloud-based technology, the growing adoption rate of modern farming techniques to enhance productivity and growing food demand are the major factors driving the precision agriculture market. The growing need to increase food production in the available agricultural land and government initiatives to increase the usage of modern technologies in agriculture are propelling the market growth. However, the requirement of high initial investment and lack of awareness among the farmers are becoming obstacles to growth. The silver lining, though, is that in the Asia-Pacific region, the precision farming industry is steadily taking root through joint ventures between global agri-tech players and local companies. Let’s explore further.

AGCO Corporation, a global leader in the design, manufacture and distribution of agricultural machinery and precision ag technology from the US and Trimble, a global technology company delivering solutions from the US on April 1 announced the closing of their joint venture (JV) transaction. The JV, known as PTx Trimble, combines Trimble’s precision agriculture business and AGCO’s JCA Technologies to form a new company that will better serve farmers with factory fit and retrofit applications in the mixed-fleet precision agriculture market.

The formation of PTx Trimble enhances AGCO’s comprehensive technology offering around guidance, autonomy, precision spraying, connected farming, data management and sustainability. Both these companies have a strong presence in the Asia Pacific region.

PTx will serve farmers around the world including Asia Pacific region through three go-to-market approaches. Specialised precision ag dealers will help farmers retrofit almost any make or vintage of equipment they already own with the latest technologies. PTx will also expand its relationships with more than 100 original equipment manufacturer (OEM) partners that can integrate products from the PTx portfolio directly at the factory.

The strategic alignment of these brands will facilitate the rapid growth of AGCO’s technology transformation and will support the future development and distribution of next-generation ag technologies for farmers and OEMs in the region.

FMC India, an agricultural sciences company in March 2024, has launched its innovative precision agriculture platform Arc Farm Intelligence in India. It is aimed at encouraging smarter agricultural practices for farmers, advisers and channel partners. By combining real-time data and predictive modelling, Arc farm intelligence assists farmers in monitoring field conditions and pest pressure. Farmers can then ensure precise application of the recommended crop care products to optimise yield and achieve higher returns on investment.

Satyukt, a leading global Ag-tech company from India at the forefront of harnessing satellite data, advanced technology, and machine learning, and ASSOCHAM UP-UK and GNET have forged a strategic alliance in India poised to revolutionise precision farming using Sat2Farm technology in March 2024.  This collaboration extends to agribusinesses and researchers, who leverage integrated data to gain valuable insights into regional agricultural trends, enabling strategic resource allocation and fostering sustainable growth across the agricultural value chain of Uttar Pradesh.

In February 2024, Satyukt and Zuari FarmHub entered into a strategic alliance to redefine the landscape of precision farming through Satyukt’s APIs. Leveraging the power of the Application Programming Interface (API), Satyukt will provide access to farm management solutions to farmers and other stakeholders associated with Zuari FarmHub.

Besides, we see many companies joining hands with other regional and global firms in the precision agriculture space to provide farmers with cutting-edge tools for decision-making and automation. This integration of advanced technology enhances the effectiveness and efficiency of farming practices, driving further adoption among tech-savvy farmers.

The scalability, accessibility, and data integration capabilities of cloud-based precision farming software provide farmers with essential tools to optimise their operations, enhance productivity, and promote sustainability. Leveraging the power of cloud technology, farmers can access real-time insights into their operations, empowering them to make data-driven decisions that drive efficiency and effectiveness.

In the Asia-Pacific region, rising investment in the adoption of precision farming technologies such as drones, automated harvesting systems and driverless tractors are expected to create lucrative opportunities for the precision agriculture market players. The growing use of real-time and multimodal systems in the agricultural field is expected to support the growth of the precision farming market in the future.

To read more click on: https://agrospectrumindia.com/e-magazine

 In the Asia-Pacific region, the precision farming

Agribusiness, Agrotech, Company News, Digital Technologies, World

AGCO has acquired an 85 per cent stake in PTx Trimble, and Trimble will hold a 15 per cent stake.

AGCO Corporation and Trimble announced the closing of their joint venture (JV) transaction. The JV, known as PTx Trimble, combines Trimble’s precision agriculture business and AGCO’s JCA Technologies to form a new company that will better serve farmers with factory fit and retrofit applications in the mixed-fleet precision agriculture market.

AGCO has acquired an 85 per cent stake in PTx Trimble, and Trimble will hold a 15 per cent stake. Going forward, the PTx Trimble JV will be consolidated into AGCO’s financial statements.

“Farmers worldwide need technologies that support them to be more productive and profitable while minimizing the environmental impact of their operations,” said Eric Hansotia, AGCO’s Chairman, President and Chief Executive Officer. “PTx Trimble will provide farmers greater access to next-generation precision ag tools, no matter what brands of tractors and implements they operate.”

The formation of PTx Trimble enhances AGCO’s comprehensive technology offering around guidance, autonomy, precision spraying, connected farming, data management and sustainability.

“Farmers are the real winners here,” said Rob Painter, Trimble’s President and Chief Executive Officer. “By combining our expertise and resources through this JV, we aim to accelerate the pace of innovation. With a focus on open technologies, customers will benefit from tech solutions available to farmers across a broad range of tractor and implement brands.”

AGCO’s consolidated precision ag revenue is now expected to exceed $2.0 billion by 2028, and the transaction is expected to be accretive to AGCO’s revenue growth, adjusted operating margin profile and adjusted earnings per share in the first full year post-close.

AGCO financed the transaction through a combination of $1.1 billion in recently issued senior unsecured notes, a $500 million term loan facility, other borrowings and cash on hand.

AGCO has acquired an 85 per cent

Agrotech

According to the report, the fastest-growing market is North America and the largest market is Asia Pacific

The global agriculture equipment market size was estimated at $112.84 billion in 2021. The agriculture equipment includes various mechanised equipment such as tractors, harvesters, plant protection equipment, and irrigation equipment that helps in agricultural activities. This modern and technologically advanced equipment helps in producing higher yields with fewer efforts. Further, it saves time by boosting the activities, reduces the use of labour, and saves labour cost.

Agriculture is the primary source of food across the globe. And with the rapid increase in the global population, the demand for food has increased rapidly, creating pressure on the food supply chain. Therefore, the demand for modern agriculture equipment has increased in order to obtain higher yields in less time, thereby propelling the growth of the global agriculture equipment market.

The growth rate from 2021 to 2030 has been projected at a CAGR of 4.6 per cent. According to the report, the fastest-growing market is North America and the largest market is Asia Pacific. The companies covered are CNH Industrial NV, EXEL Industries, Mahindra and Mahindra, Deere & Company, Kubota Corporation, Tractor and Farm Equipment, AGCO Corporation, SDF S.p.a., Bucher Industries AG, CLAAS, ISEKI & Co.

According to the report, the fastest-growing market