London-based CNH Industrial N.V. on June 21 announced that it has entered into an agreement to acquire 100 percent of the capital stock of precision ag company Raven Industries Inc. for $58 per share, representing a $2.1 billion enterprise value and a 33.6 percent premium to the Raven Industries four-week volume-weighted average stock price.
CNH said the acquisition builds upon a long partnership between the two companies, and will enhance its position in the global agriculture equipment market by adding innovation capabilities in autonomous and precision agriculture technology. CNH said the transaction will be funded with available cash on hand.
Closing is expected to occur in the fourth quarter of 2021, subject to the satisfaction of customary closing conditions, including approval of Raven shareholders and receipt of regulatory approvals. Raven is headquartered in Sioux Falls, S.D.
“Precision agriculture and autonomy are critical components of our strategy to help our agricultural customers reach the next level of productivity and to unlock the true potential of their operations,” said Scott Wine, CEO of CNH. “Raven has been a pioneer in precision agriculture for decades, and their deep product experience, customer driven software expertise, and engineering acumen offer a significant boost to our capabilities.”
“Our board and management are excited about this partnership and what it means for our future,” said Dan Rykhus, President and CEO of Raven. “We look forward to CNH Industrial leveraging the Raven talent and culture, as well as the Sioux Falls community, as part of their vision and future success.”
Raven is a global technology partner for key strategic OEMs, agriculture retailers, and dealers. The company is organized into three business divisions: Applied Technology (precision agriculture), Engineered Films (high-performance specialty films), and Aerostar (aerospace). The company posted consolidated net sales of $348.4 million for the twelve months ended Jan. 31, 2021.
CNH said it plans to undertake a strategic review of each business to best position them for future success and maximize shareholder value. The transaction is expected to generate approximately $400 million of run-rate revenue synergies by calendar year 2025, resulting in $150 million of incremental EBITDA.
Raven joins a stable of ag companies in CNH’s portfolio, including Case IH, New Holland Agriculture, and Steyr. CNH also owns Case and New Holland Construction for earth moving equipment; Iveco for commercial vehicles; Iveco Bus and Heuliez Bus for buses and coaches; Iveco Astra for quarry and construction vehicles; Magirus for firefighting vehicles; Iveco Defense Vehicles for defense and civil protection; and FPT Industrial for engines and transmissions.