DULUTH,
Ga., July 25, 2024 /PRNewswire/ -- AGCO
Corporation (NYSE: AGCO), a global leader in the design,
manufacture and distribution of agricultural machinery and
precision ag technology, announced it has entered into a definitive
agreement to sell the majority of its Grain & Protein business
to American Industrial Partners ("AIP") in an all-cash transaction
valued at $700 million, subject to
working capital and other customary closing adjustments.
"The divestiture of Grain & Protein supports AGCO's
strategic transformation, recently accelerated by the PTx Trimble
joint venture, which closed in April
2024," said Eric Hansotia,
AGCO's Chairman, President and Chief Executive Officer. "Divesting
this business allows us to streamline and sharpen our focus on
AGCO's portfolio of award-winning agricultural machinery and
precision ag technology products, which underpins a long-term focus
on high growth, high margin and high free cash flow generating
businesses."
"AIP has extensive experience in the industrial sector and vast
carve-out expertise, which we believe will unlock new potential for
the Grain & Protein business. We believe the move will help
ensure its brands continue to lead the market in grain, seed and
protein production equipment and remain well-positioned to deliver
for farmers," added Hansotia.
AGCO expects to use the net proceeds from the transaction
consistent with its stated capital allocation priorities, including
debt repayment, disciplined investment in technology and organic
growth initiatives and return of capital to shareholders.
The transaction perimeter to be sold includes the five primary
Grain & Protein brands – GSI®, Automated Production® (AP),
Cumberland®, Cimbria® and Tecno®. The transaction perimeter to be
sold excludes AGCO's Grain & Protein business in China.
AGCO will begin reporting Grain & Protein as held for sale
in the company's consolidated financial statements for the second
quarter of 2024 through the closing date. The company expects
to incur a loss on the sale of the business in the range of
$450 million to $475 million.
The transaction purchase price implies a transaction multiple of
approximately 8.3x based on Grain & Protein's trailing twelve
months adjusted EBITDA as of March 31,
2024.
The transaction is anticipated to close before the end of the
year, subject to regulatory approvals and other customary closing
conditions.
Morgan Stanley & Co. LLC and Rabo Securities USA, Inc. are acting as financial advisors to
AGCO. Simpson Thacher & Bartlett LLP is acting as legal advisor
to AGCO. Santander Corporate & Investment Banking is acting as
financial advisor to AIP and is leading the fully committed debt
financing. Sidley Austin LLP is acting as legal counsel to AIP.
About AGCO
AGCO (NYSE: AGCO) is a global leader in the design, manufacture and
distribution of agricultural machinery and precision ag technology.
AGCO delivers value to farmers and OEM customers through its
differentiated brand portfolio including core brands like Fendt®,
GSI®, Massey Ferguson®, PTx and Valtra®. AGCO's full line of
equipment, smart farming solutions and services helps farmers
sustainably feed our world. Founded in 1990 and headquartered
in Duluth, Georgia, USA, AGCO had
net sales of approximately $14.4 billion in 2023. For more
information, visit www.agcocorp.com. For company news, information,
and events, please follow us on X: @AGCOCorp. For financial news on
X, please follow the hashtag #AGCOIR.
About AIP
American Industrial Partners ("AIP") is an
industrials investor, with approximately $16
billion in assets under management. AIP is distinctively
focused on industrial businesses across a broad range of end
markets that include: aerospace and defense, automotive, building
products, capital goods, chemicals, industrial services, industrial
technology, logistics, metals & mining, and transportation,
among others. AIP looks to generate differentiated returns by
investing in quality industrial businesses with strong management
teams and working with those teams to implement comprehensive
operating agendas to build long-term value. Current AIP portfolio
companies generate aggregate annual revenues of approximately
$25 billion and employ approximately
65,000 employees as of March 31,
2024. In October 2023, AIP
closed its eighth fund at $5.1
billion. www.americanindustrial.com
Cautionary Statements Regarding Forward-Looking
Information
Forward-looking statements in this release,
including statements about the transaction and our strategic plans
as well as the financial impact to the Company resulting therefrom,
and our ability to close the transaction and the timing of the
closing, are subject to risks that could cause actual results to
differ materially from those suggested by the statements. These
risks include, but are not limited to, the ability to successfully
complete the divestiture of Grain & Protein on a timely basis,
including receipt of required regulatory approvals and satisfaction
of other conditions, the risk that the loss on sale of the assets
could ultimately be greater than we currently expect, and the
ability of the Company to use the proceeds of the transaction
consistent with its stated capital allocation priorities. Further
information concerning these and other risks is included in AGCO's
filings with the SEC, including its Form 10-K for the year ended
December 31, 2023 and subsequent Form
10-Q filings. AGCO disclaims any obligation to update any
forward-looking statements except as required by law.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/agco-announces-definitive-agreement-to-sell-its-grain--protein-business-302206632.html
SOURCE AGCO Corporation