Autosteer and ag equipment guidance system maker AgJunction is poised to sell itself to farm equipment maker Kubota Corp. in a $91 million all-cash deal.
Publicly-traded AgJunction, which is registered in Calgary but based at Scottsdale, Ariz., said Thursday its board has unanimously approved Kubota’s 75-cents-per-share proposal and recommended shareholders vote in favour.
AgJunction would be taken private under this deal and its common shares delisted from the TSX.
The company makes guidance and autosteering hardware and software products for precision agriculture, including systems for original equipment manufacturers (OEM) and the Wheelman brand of after-market autosteer systems for farmers.
The company’s Canadian roots date back to 1990, when it launched under the name Canadian Systems International (CSI). Up until 2018 it owned the Outback Guidance aftermarket positioning and autosteer technology business.
AgJunction, in a release, said farm equipment automation is “rapidly advancing with increasing investment and consolidation” — but adoption of new automation calls for “tighter vehicle integration and large-scale distribution.”
Kubota’s proposed deal, AgJunction said, is the best option given “current industry, economic and capital markets conditions as well as (the) existing strategic relationship between AgJunction and Kubota.”
AgJunction board chair Lori Ell, in the same release, said the deal is “expected to accelerate the execution of AgJunction’s business plan, enhance access to additional customers and markets (and) provide efficiencies from greater scale.”
The deal with Kubota, Ell said, also “allows the opportunity for the retention of many AgJunction employees in the go-forward entity.”
The deal is subject to approval from AgJunction shareholders, who are expected to vote on the matter at a meeting next month, and from Alberta’s Court of Queen’s Bench after that.
Separately on Tuesday (Oct. 12), Kubota announced a “collaboration research agreement in the field of smart agriculture” with California-based Topcon Positioning Systems.
That agreement would see the two companies “work collaboratively to move forward with research and development into smart agriculture in a wide range of fields.”
Those fields, Kubota said, include “collecting and managing agronomic data that utilizes various sensors, and solutions for productivity improvements through automation utilizing big data.” — Glacier FarmMedia Network