CNH announced Thursday it will pay $175 million for Hemisphere, which has been owned since 2013 by Chinese geospatial tech firm Beijing Unistrong (all figures US$).

CNH described the deal for Hemisphere as “a critical step that advances our automated and autonomous solutions for agriculture and construction.”

The machinery maker has undertaken a major push into autonomous ag — most significantly in 2021 with the $2.1 billion purchase of U.S. precision ag tech firm Raven Industries, whose products include the Canadian-developed OMNiPower (formerly DOT) autonomous equipment system.

CNH also bought control of U.S.-Greek precision ag and field analysis tech firm Augmenta earlier this month, and a minority stake in U.S. ag sensor firm EarthOptics in January.

Hemisphere, which was spun off from U.S.-based AgJunction — now an arm of Kubota Corp. —  acquired the Kansas-based Outback Guidance business from AgJunction in 2018.

Combined with its Raven business’ capabilities, CNH said Thursday, “this development gives us full control of our precision and navigation technologies.”

“Having Hemisphere’s technology in-house will enable us to accelerate a broad range of our precision technology programs, providing our customers with immediate productivity-enhancing solutions,” Marc Kermisch, CNH’s chief digital and information officer, said in Thursday’s release. “It will also increase the long-term competitiveness and flexibility of our agriculture and construction portfolio.”

Hemisphere will, however, continue to operate as a standalone business through its operations in Canada, the U.S. and Australia, CNH said.

Headquartered in Scottsdale, Ariz., Hemisphere’s Canadian operations include a site in Calgary and its Outback Guidance site at Oak Bluff, Man., just southwest of Winnipeg.

Hemisphere’s global navigation satellite system (GNSS) and related electronics and software provide “pinpoint accuracy” for agriculture, construction, mining and marine tools, CNH said. The company’s tech includes circuit chips, circuit boards, radio frequency signal processing, navigation algorithms and satellite-based correction designs.

Hemisphere CEO Farlin Halsey said the combination with CNH “enables us to further enhance our technology and product development” in those core markets and to “directly integrate our technology with CNH Industrial’s world-class equipment.”

The deal, pending regulatory and shareholder approvals, is expected to close sometime in the third quarter of 2023. — Glacier FarmMedia Network

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In a bid to focus on its higher-margin agriculture and construction machine businesses, where data content, autonomous technologies and alternative fuels are increasingly at core, CNH Industrial at the beginning of this year completed the spin-off of its truck, bus and engine operations, now separately listed as Iveco Group.

In slides prepared for the strategy presentation the group, which is controlled by Exor NV, the holding company of Italy’s Agnelli family, forecast net sales of between $20 billion and $22 billion in 2024, up from $17.8 billion last year (all figures US$).

CNH, which houses brands such as Case and New Holland, also guided for a margin on its adjusted operating profit (EBIT) of between 12 and 13 per cent in 2024 from 9.9 per cent in 2021, with that of its agriculture unit increasing to between 14.5 and 15.5 per cent from 12.3 per cent over the same period.

After buying Raven Industries last year for $2.1 billion to bolster its position in precision agriculture and autonomy, CNH will now focus on “disciplined” M+A activity, it added.

“We’re not buying to get bigger, our dollars are going to go towards driving organic growth,” CEO Scott Wine told analysts during the plan presentation.

“Disciplined M+A will be a key part of our strategy going forward.”

The company added it was seeing strong buyer interest for Raven’s engineered films and aerostar units, the two non-core business it plans to sell.

Chief digital officer Parag Garg said CNH was well placed to be leaders in autonomy and help customers throughout the entire farming cycle.

“Automation is a key strength for CNH Industrials tech strategy, already bringing benefits to farmers across the world across the whole cycle and helping build a backbone for it to deliver an autonomous future,” he told analysts.

— Reporting for Reuters by Giulio Piovaccari in Milan and Bianca Flowers in New York.

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CNH Industrial on Monday announced a friendly all-cash agreement to buy up all shares in Sioux Falls, South Dakota-based Raven Industries for about US$2.1 billion (C$2.62 billion).

The deal values Nasdaq-traded Raven at US$58 per share, which CNH said represents a premium of 33.6 per cent to the shares’ four-week volume-weighted average.

CNH, in a release, noted Raven’s status as “a global technology partner for key strategic (original equipment manufacturers), agriculture retailers and dealers.”

“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,” CNH Industrial CEO Scott Wine said in Monday’s release.

“The combination of Raven’s technologies and CNH Industrial’s strong current and new product portfolio will provide our customers with novel, connected technologies, allowing them to be more productive and efficient.”

As for Raven’s manufacturing presence in the U.S., Sioux Falls “is and will continue to be a true centre of excellence,” Wine said.

CNH and Raven, he said, will “collaborate in bringing our customers more integrated precision and autonomous solutions, not only to improve productivity and profitability, but also promote more sustainable solutions and environmental stewardship” and create “a stronger business for our employees, dealer network, and customers.”

The proposed deal is expected to close is expected to occur in the fourth quarter of this year, pending the usual closing conditions including approvals from regulators and Raven shareholders.

The deal comes just weeks after Raven announced a partnership with farm equipment maker Agco, chemical company BASF and engineering, tech and tool firm Bosch to collaborate on targeted spraying technology.

The deal would also give CNH control of the Canadian-developed DOT autonomous ag equipment system, which Raven took over last year and recently rebranded under the name OMNiPower. Raven in November last year also set up a new Canadian headquarters for its “Applied Technology” precision ag business at Emerald Park, Sask., just east of Regina.

Raven’s precision ag arm is one of three units in the company, also including high-performance specialty films and its Aerostar aerospace technology business.

Raven’s engineered films and Aerostar segments are “industry leaders” in those sectors, CNH said, adding it “believes they represent attractive independent businesses with excellent near and long-term potential.”

Thus, CNH said it would conduct a “strategic review” of those two businesses “to best position them for future success and maximize shareholder value.”

Combined, Raven’s three units generated US$348.4 million in net sales for the year ending Jan. 31. CNH said it expects the deal to generate about US$400 million in “run-rate revenue synergies” by calendar 2025, producing US$150 million of incremental EBITDA (earnings before interest, taxes, depreciation and amortization).

“Our relationship with CNH Industrial has expanded over decades, and we have a deep respect for one another and a shared commitment to transform agriculture practices across the world,” Raven CEO Dan Rykhus said in the same release. — Glacier FarmMedia Network

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The autonomous machine started as a hobby project of SeedMaster’s president and founder, Norbert Beaujot, but it evolved into a production offering for the company.

However, in late 2019, DOT Technology Corp. (the subsidiary company formed by SeedMaster to focus on DOT autonomous technology) was sold to SeedMaster’s technology partner Raven Industries, who decided to merge it into the company’s stable of concept autonomous ventures. That changed the market trajectory of DOT, with Raven deciding to pause the commercialization effort temporarily as it undertook further R&D.

There are currently four customers who have purchased a DOT. And another seven units in Saskatchewan are working through Raven’s validation program in farm fields with company staff operating them.

Raven expects to expand the validation program through the start of next season with possibly another four or five machines added to the program, some of them possibly in the United States and abroad.

DOT’s original corporate owner, SeedMaster (as the parent company of DOT Technology Corp.), will continue to manufacture the specially designed 30-foot seed drill designed to mate with it, as well as a trailer for road transport. Currently, two other firms are producing a unique implement designed to mate with the machine — New Leader, which builds a dry product spreader, and Pattison Liquid Systems, which builds a 120-foot sprayer.

AutoCart ready for 2021

While no major changes are expected in the design of DOT, according to a company spokesperson, those changes that do result are likely to be in the technology used to control it. Raven has integrated some of the sensors and systems used on its other autonomous project, AutoCart, which is a system designed to allow a driverless tractor to pull a grain cart in a field at harvest.

The company claims AutoCart will be commercially available in time for the 2021 harvest season. And at the beginning of December 2020, the company announced it is already accepting pre-orders for the autonomous grain cart system.

Raven’s website describes AutoCart’s abilities this way: “AutoCart lets farmers set a field plan, stage locations, adjust speeds, monitor location activity and command the tractor pulling a grain cart to sync with the combine as it offloads on the go. The driverless tractor can then be returned to a predetermined unloading area. AutoCart provides the farmer the ability to monitor and operate a driverless tractor from the cab of the combine.”

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Raven Industries, which last November bought an undisclosed majority ownership share in DOT Technology — with an option to buy the remaining stake in the following 10 years — announced an agreement Monday to buy that remaining “noncontrolling interest.”

Sioux Falls, S.D. -based Raven said Monday its latest move is a “further indication of (its) confidence in its position to bring these innovations to market and expand its market share in precision ag technology.”

DOT’s principal product, unveiled at the Ag in Motion farm show in Saskatchewan in 2017, is a U-shaped, self-guiding, diesel-powered platform, built to handle various farm implements and use path planning technology to complete field tasks.

About 10 of the DOT Power Platform units operated in fields in Western Canada last year, and a demo unit made its first appearance in the East in September, handling a prototype planter as well as a seeder and dry fertilizer spreader at Canada’s Outdoor Farm Show.

Raven said last fall it would set DOT up in its Raven Applied Technology division, “in support of its strategic growth platform, Raven Autonomy.”

Its plan is to marry DOT to the SmartAg autonomous perception and path planning technology Raven bought last fall, and to Raven’s own technology platforms in guidance, steering and machine control.

Raven said it’s “currently moving forward with commercialization of Raven Autonomy and will be expanding its portfolio with new offerings, which will increase the value of autonomy to end-users at a rapid pace.”

Publicly-traded Raven, in its annual report released last week, said it plans to commercialize its first Raven Autonomy products in fiscal 2021 by bringing the DOT system and AutoCart to the market. The AutoCart system allows users to operate a driverless tractor and grain cart from the cab of a combine.

Raven’s Applied Technology arm, in the same report, said it expects to invest about $15 million in research and development and selling activities in 2021, having cut back its previous $20 million target “in light of the current economic environment.”

Raven and DOT had been working together since mid-2018, when DOT made plans to outfit its platform with Raven’s steering, guidance and propulsion tech.

Raven “has been a critical partner in helping to get DOT to where we are today,” Norbert Beaujot, DOT’s owner and founder, said last fall. “Our combined technologies will undoubtedly help accelerate speed to market and adoption of machine autonomation.”

Raven didn’t say Monday, nor last fall, how much it planned to pay for DOT or for Iowa-based SmartAg.

In last week’s annual report, however, Raven booked a US$56.4 million decrease in cash and cash equivalents from the previous quarter and described the decrease in cash as “primarily driven by the acquisition of Smart Ag and a majority ownership in DOT.” — Glacier FarmMedia Network

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Sioux Falls, S.D. precision agriculture manufacturer Raven Industries announced last week it has closed its deal to buy majority ownership in Regina-based DOT Technology Corp. for an undisclosed sum.

DOT said the deal will allow it to “further capitalize on its position as a leader in the autonomous agriculture sector, providing farmers a real way to address labour shortages, high equipment cost and rising operational expenses.”

DOT’s principal product — which has made waves in the farm equipment sector since its unveiling at Ag in Motion in 2017 — is a U-shaped, self-guiding, diesel-powered platform, built to handle various farm implements and use path planning technology to complete field tasks.

About 10 of the DOT units operated in Prairie fields in 2019, and a demo unit made its first appearance in the East in September, at Canada’s Outdoor Farm Show, where it handled a prototype planter as well as a seeder and dry fertilizer spreader.

Raven said its investment will be set up under its Raven Applied Technology division, “in support of its strategic growth platform, Raven Autonomy.”

DOT’s founder Norbert Beaujot said the deal with Raven “greatly accelerates DOT’s speed to market, as well as the quality of the system, for farmers who are seeking a path to autonomy.”

Raven “has been a critical partner in helping to get DOT to where we are today,” said Beaujot, who previously set up seeding systems manufacturer SeedMaster in the Regina area in 2002.

Raven and DOT have been working closely since May last year as the DOT platform was outfitted with Raven’s tech, including steering, guidance and propulsion.

“Over the last year and a half of collaborating with DOT, Raven has come to understand the value and uniqueness of the DOT platform,” Raven CEO Dan Rykhus said. “By investing in DOT’s growth, we believe we have the ability to lead in the next revolution of production agriculture.”

Through the deal, Raven said, it “will leverage the respective strengths of each entity to drive commercialization and adoption efforts of autonomy in agriculture.”

Billing itself as the market leader in steering, guidance and machine control technology, Raven said DOT will bring its “field path planning, user control experience, machine safety and remote communication software” to their “unique relationship.”

Raven, with DOT, “will accelerate the development of precision agriculture technology from semi-autonomous to fully-autonomous solutions.”

“The amount of interest DOT has here in Canada, the U.S. and globally is staggering,” DOT CEO Robert Saik said. “Raven’s involvement means our ability to provide a path to autonomy for farmers and implement manufacturers is now much stronger.” — Glacier FarmMedia Network

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