CNH Industrial N.V. has entered into an agreement to acquire 100 percent of the capital stock of Raven Industries, Inc.
CNH is paying US$58 per share, representing a 33.6 percent premium to the Raven Industries four-week volume-weighted average stock price, and US$2.1 billion Enterprise Value. The transaction will be funded with available cash on hand of CNH Industrial. Closing is expected to occur in the fourth quarter of 2021.
The acquisition builds upon a long partnership between the two companies and will further enhance CNH Industrial’s position in the global agriculture equipment market by adding strong innovation capabilities in autonomous and precision agriculture technology.
“Precision agriculture and autonomy are critical components of our strategy to help our agricultural customers reach the next level of productivity and to unlock the true potential of their operations,” said Scott Wine, chief executive officer, CNH Industrial. “Raven has been a pioneer in precision agriculture for decades, and their deep product experience, customer driven software expertise and engineering acumen offer a significant boost to our capabilities. This acquisition emphasizes our commitment to enhance our precision farming portfolio and aligns with our digital transformation strategy.”
According to Dan Rykhus, president and chief executive officer for Raven Industries, Raven has been committed to solving challenges for 65 years. “Part of that commitment includes delivering groundbreaking innovation by developing and investing in our core capabilities and technology,” he noted. “By coming together with CNH Industrial, we believe we will further accelerate that path as well as bring tremendous opportunities and value to our customers – once again fulfilling our purpose to solve great challenges.”
Headquartered in Sioux Falls, South Dakota, Raven Industries is organized into three business divisions: Applied Technology (precision agriculture), Engineered Films (high-performance specialty films) and Aerostar (aerospace) with consolidated net sales of US$ 348.4 million for the 12 months ended January 31, 2021. The company is a global technology partner for key strategic OEMs, agriculture retailers and dealers. The transaction is expected to generate approximately US$400 million of run-rate revenue synergies by calendar year 2025, resulting in US$150 million of incremental EBITDA.