- CNH Industrial (NYSE:CNHI) -0.06% premarket after it inks an agreement to acquire 100% of the capital stock of Raven (NASDAQ:RAVN) +47.23% premarket for $58.00/share, representing a 33.6% premium to the Raven Industries four-week volume-weighted average stock price, and $2.1B enterprise value.
- The transaction will be funded with available cash on hand of CNH Industrial, not affecting third party debt of industrial activities. The cash consideration for the transaction is not included in the free cash flow definition, and consequently it will not affect its free cash flow guidance for FY21.
- The acquisition builds upon a partnership between the two companies, to further enhance CNH Industrial’s position in the global agriculture equipment market by adding strong innovation capabilities in autonomous and precision agriculture technology.
- Headquartered in Sioux Falls, South Dakota, Raven Industries is organized into three business divisions: Applied Technology, Engineered Films and Aerostar with consolidated net sales of $ 348.4M for the twelve months ended January 31.
- The transaction is expected to generate ~$400M of run-rate revenue synergies by calendar year 2025, resulting in $150M of incremental EBITDA from synergies.
- The deal is expected to close in Q4, subject to approval of Raven shareholders and receipt of regulatory approvals.
- CNH Industrial does not expect the proposed acquisition to have any impact on its guidance for 2021.
- Conference call on June 21 at 8:30 AM EDT.