CNH to buy Raven Industries

Heavy equipment maker to pay US$2.1 billion for precision ag firm

Two Raven OMNiPower (formerly DOT) machines at work in the field. (RavenPrecision.com)

The parent company behind Case IH, New Holland, Flexi-Coil and Steyr farm equipment is set to absorb a significant U.S. supplier of precision ag tech to its product lines and others.

CNH Industrial on Monday announced a friendly all-cash agreement to buy up all shares in Sioux Falls, South Dakota-based Raven Industries for about US$2.1 billion (C$2.62 billion).

The deal values Nasdaq-traded Raven at US$58 per share, which CNH said represents a premium of 33.6 per cent to the shares’ four-week volume-weighted average.

CNH, in a release, noted Raven’s status as “a global technology partner for key strategic (original equipment manufacturers), agriculture retailers and dealers.”

“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,” CNH Industrial CEO Scott Wine said in Monday’s release.

“The combination of Raven’s technologies and CNH Industrial’s strong current and new product portfolio will provide our customers with novel, connected technologies, allowing them to be more productive and efficient.”

As for Raven’s manufacturing presence in the U.S., Sioux Falls “is and will continue to be a true centre of excellence,” Wine said.

CNH and Raven, he said, will “collaborate in bringing our customers more integrated precision and autonomous solutions, not only to improve productivity and profitability, but also promote more sustainable solutions and environmental stewardship” and create “a stronger business for our employees, dealer network, and customers.”

The proposed deal is expected to close is expected to occur in the fourth quarter of this year, pending the usual closing conditions including approvals from regulators and Raven shareholders.

The deal comes just weeks after Raven announced a partnership with farm equipment maker Agco, chemical company BASF and engineering, tech and tool firm Bosch to collaborate on targeted spraying technology.

The deal would also give CNH control of the Canadian-developed DOT autonomous ag equipment system, which Raven took over last year and recently rebranded under the name OMNiPower. Raven in November last year also set up a new Canadian headquarters for its “Applied Technology” precision ag business at Emerald Park, Sask., just east of Regina.

Raven’s precision ag arm is one of three units in the company, also including high-performance specialty films and its Aerostar aerospace technology business.

Raven’s engineered films and Aerostar segments are “industry leaders” in those sectors, CNH said, adding it “believes they represent attractive independent businesses with excellent near and long-term potential.”

Thus, CNH said it would conduct a “strategic review” of those two businesses “to best position them for future success and maximize shareholder value.”

Combined, Raven’s three units generated US$348.4 million in net sales for the year ending Jan. 31. CNH said it expects the deal to generate about US$400 million in “run-rate revenue synergies” by calendar 2025, producing US$150 million of incremental EBITDA (earnings before interest, taxes, depreciation and amortization).

“Our relationship with CNH Industrial has expanded over decades, and we have a deep respect for one another and a shared commitment to transform agriculture practices across the world,” Raven CEO Dan Rykhus said in the same release. — Glacier FarmMedia Network

About the author

Editor, Daily News

Dave Bedard

Editor of Daily News for the Glacier FarmMedia Network. A Saskatchewan transplant in Winnipeg.

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