Published - 22 Jun 2021
Recently CNH Industrial N.V. revealed that they came into agreement to obtain 100% of Raven Industries capital stock. US$58 per share of precision agriculture technology represents a 33.6% premium of 4 week volume weighted average stock pierce and US$2.1 billion enterprise value of Raven Industries. CNH Industrial will be funded the transaction with cash on hand. In 2021 the fourth quarter occurring of closing is expected, subject to the contentment of customary closing positions, which includes the consent of Raven shareholders and receipt of regulatory acceptance.
The procurement forms upon an extensive partnership among the two companies and will further increase CNH Industrial’s situation in the world farm equipment market by connecting powerful innovation abilities in precision and autonomous agriculture technology.
Chief Executive Officer of CNH Industrial, Scott Wine, said in an interview that “Autonomy and precision agriculture are a censorious element of our plan to assist the farming sector so that they can enhance their productivity and unlock their true prospective.” “In precision agriculture Raven has been a pioneer for decades, and they have a deep product experience plus they providing customer driven software proficiency and engineering awareness provide a notable raise to our abilities. This partnership significance our obligation to increase farming range and portfolio with digital transformation plan. The amalgamation of CNH Industrial and Raven’s technology will offer our customers with connected technologies, permitting them to be more efficient and productive.”
He added, “Our Management and Board are thrilled about this Tractor Guru and it is best for the future, said by Chief Executive Officer for Raven Industries, Dan Rykhus. Now about 65 years, our company has been ready to solve every challenge. This commitment includes fresh innovation by investing and developing in core applities and technology. By amalgamation with CNH Industrial, we presume that we will further open up the path moreover bring immense moments and value to our customers. With the passing time our connections with the CNH Industrial have enhanced and we have a huge respect for each other and shared a loyalty to modify farm practices over the world. We are looking forward to the CNH Industrial partnership with Raven culture and talent of aim to provide better and improved agriculture in future.”
“Raven Industries, innovation culture, engineering talent and entrepreneurial spirit are splendid and will carry on as a part of the CNH Industrial family.” Wine added. “We are excited to unite in bringing our customers more desegregate autonomous and precision solutions, not only to enhance profitability and productivity, but this also encourages more environmental stewardship and sustainable solutions. Jointly, our groups will generate a powerful business for our dealer network, employed and customers, that surely share the future of world leading sustainability credentials, farming and increasing our growth opportunities.”
South Dakota, Sioux Falls Headquarter, Raven Industries is arranged into three business divisions: Engineered Films (high performance speciality films), Aerostar (aerospace) and Applied Technology (precision agriculture) with a combined US$ 348.4 million of net sales for the 12 months ended 31 January 2021. The company is a global technology partner for leading strategic OEMs, agricultural dealers and retailers. The transaction is anticipated to give rise to approximately US$400 million of run rate revenue synergies by the calendar year 2025, arising in an incremental EBITDA of US$150 million from synergies.
The Aerostar segments and Engineered Films are industry bosses in the superb performance, stratospheric platform industries and speciality films. CNH Industries presumes that they symbolized interesting independent business with superb near and continual potential. As per CNH Industrial strategy to undertake a plan to review every business to the best position for increased shareholder value and future success.
CNH Industrial does not look for the come up with acquisition will have any effect on its 2021 guidance. The accession is anticipated to be financed with group amalgamated cash1 not influencing 3rd party debt of industrial activities 2. Cash deliberation for the transaction is not comprised in the definition of the free cash flow, and therefore, it will not influence its guidance of free cash flow for the F.Y. 2021E.
J.P. Morgan Securities LLC acted as investment analysts to Raven and Davis Polk & Wardwell LLP as its legal counsel. Goldman Sachs and Barclays acted as investment analysts to CNH Industrial and Sullivan & Cromwell LLP as its legal counsel.
CNH Industrial arranged an investor conference call yesterday at 2:30 p.m. BST/ 8:30 a.m. CEST/ 1:30 p.m. EDT to talk over this transaction. On that call, they made a full flashed deal about this amalgamation and deal with escalating the future of global agriculture.
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