Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

AGCO Buys Cimbria, Expands Handling & Storage Business

Published 06/30/2016, 04:50 AM
Updated 07/09/2023, 06:31 AM

The maker of farm equipment, machinery and replacement parts, AGCO Corporation (NYSE:AGCO) has entered into an agreement to acquire Cimbria Holdings Ltd. from Silverfleet Capital for approximately $340 million.The buyout will assist AGCO to expand its grain storage and seed handling business.

Cimbria, the Danish-headquartered manufacturer of equipment and processing lines for seed and grain, had been acquired by Silverfleet Capital, the European private equity firm, in Apr 2013. Following the acquisition, Cimbria has expanded into high-growth markets of grain and seed in Egypt and other Middle-Eastern countries. It also expanded its sales operations to cover after sales.

Cimbria’s extensive products and services include equipment for cleaning, drying and storing grain and seed through the development, manufacture and installation of individual machines, customized systems and complete turnkey plants. The company also provides project management and process-control consulting services to its customers.

Cimbria operates production facilities in four countries including Denmark, Austria, the Czech Republic and Italy and has approximately 900 employees. Cimbria sales, which are expected to reach approximately $240 million in fiscal 2016, are concentrated in Western Europe with growing exposure to Eastern Europe, Africa and the Middle East.

The Cimbria buyout will help in significantly enhancing AGCO’s market position in the European grain handling and storage industry. AGCO’s products are sold through five core machinery brands, one of which is GSI. Cimbria’s products are compatible with GSI’s offerings.

The acquisition is also favorable for AGCO as it will offer substantial marketing and cost-saving synergies as well as strengthen capabilities to serve global customers. Further, Cimbria acquisition will assist AGCO in business growth coupled with margin expansion.

The Cimbria acquisition is subject to regulatory approvals and is expected to close in third-quarter 2016. Rabobank is acting as the financial advisor and Herbert Smith Freehills is serving as the legal advisor to AGCO for the transaction.

AGCO’s GSI sales were up about 8% year over year, excluding currency impact and including the benefit of acquisitions for first-quarter 2016. It expects GSI sales to increase approximately 10% in 2016, compared to 2015, on a constant-currency basis. The takeover of Cimbria may boost GSI sales for the entire year.

AGCO currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the industrial products sector include Alamo Group, Inc. (NYSE:ALG) , Altra Industrial Motion Corp. (NASDAQ:AIMC) and Alarm.Com Holdings, Inc. (NASDAQ:ALRM) . All these stocks carry a Zacks Rank #2 (Buy).



AGCO CORP (AGCO): Free Stock Analysis Report

ALAMO GROUP INC (ALG): Free Stock Analysis Report

ALTRA INDUS MOT (AIMC): Free Stock Analysis Report

ALARM.COM HLDGS (ALRM): Free Stock Analysis Report

Original post

Zacks Investment Research

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.