Deere to buy planter-maker Monosem
Deere & Co. has agreed to acquire Monosem, the European leader in precision planter manufacturing, as the world’s largest producer of agricultural machinery seeks technology that improves farmer productivity.
Acquiring Monosem, which makes planters that can be customized for tillage style, inputs and row spacing, “positions John Deere to serve more customers worldwide,” John May, chief information officer of the Moline, Ill.-based company, said Monday in a statement.
The terms of the deal, which will include four facilities in France and two in the U.S., weren’t disclosed.
The acquisition “shows that Deere takes both the market opportunity and the emerging competitive landscape seriously,” Larry De Maria, a New York-based analyst for William Blair & Co., said Monday. “Given the lower commodity prices and relatively weak farm economy for equipment, this begins to move Deere beyond traditional precision agriculture, which will provide a different set of commercial opportunities.”
Deere is facing a thirdstraight year of falling revenue
and earnings per share in the fiscal year that started this month as sales of farm equipment such as combines and tractors continue to drop around the globe because of lower crop prices. Farm equipment sales will likely be “dismal” in 2016 as weak markets and an inventory glut weigh on the industry, said Bloomberg Intelligence analysts Christopher Ciolino and Karen Ubelhart in a report on Oct. 13.
Soybean and wheat futures have tumbled 13 percent this year in Chicago.
The “next revolution in productivity and yield improvement for farming” will come from greater use of technology by seed companies, equipment manufacturers, agronomists, crop consultants, service providers and growers, De Maria said in a report on precision agriculture in May. De Maria said lower commodity prices will create a “greater need for technology innovation and adoption in the future, leading to a complete digitally integrated farm.”
Monosem has been familyowned since it was founded in 1948.
Deere gained $2.19, or 2.8 percent, to close Monday at $80.19 in New York. The stock had tumbled 9.6 percent this year before Monday.