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HomePosts Tagged "AGCO’s Chairman"
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

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