AgJunction, Novariant Announce Merger

AgJunction Inc. and Novariant Inc. have entered into an agreement under which AgJunction has agreed to acquire Novariant through a merger transaction pursuant to which AgJunction will issue common shares to Novariant shareholders, according to an AgJunction media release.

Combined, the two companies establish a preeminent position in automated steering and machine control technologies worldwide, combining product portfolios and leveraging industry-leading intellectual property.

Specifically, Novariant and AgJunction will be better positioned to achieve market objectives through leveraging:

  • A larger presence with more resources.
  • A broader OEM partner list.
  • One of the precision agriculture industry’s most comprehensive intellectual property portfolios, providing increased IP protection for OEM partners.
  • Increased R&D capability and efficiency.
  • Complementary customers, market geographies and distribution channels.
  • Reductions in operating redundancy to further improve profitability.

“Through the combination of each companies’ intellectual property, product portfolios, global customers and innovation resources, we immediately create the opportunity to reach objectives far beyond what we could accomplish separately,” said Rick Heiniger, AgJunction President & CEO, in a conference call on the merger.

Heiniger also detailed a bit of the two companies’ rationale behind the merger – which the companies believe will afford them the “leading market position in autosteer technologies.”

“First, the combined companies will enjoy a larger market presence with more resources, increasing their ability to work side-by-side with customers around the world,” he explained. “Second, we will be establishing, managing and extending the industries’ most comprehensive intellectual property portfolio related to machine positioning, guidance and movement – an area of increasing strategic importance to our current and future customers.

“Third,” he continued. “Our ability to accelerate innovation will be significantly increased through newly integrated R&D capabilities and efficiencies. Fourth, our respective sales and marketing organizations will immediately benefit from complimentary customers, market geographies and distribution channels which will provide increased revenue opportunities. And fifth, our combined organizations will be able to pursue appropriate reductions in operating redundancy to further improve profitability.”

Asked how the merger will affect AgJunction’s other commercial partners, specifically Ag Leader, Heiniger issued the following statement: “During the coming weeks we’ll be disclosing more details as regulatory considerations permit,” Heiniger said in an email to PrecisionAg.com. “I can’t speak directly about Ag Leader, but I can say in general we anticipate no adverse affect for any client of either company.”

Novariant is a premier provider of advanced steering solutions for precision agriculture. Based in Silicon Valley, Novariant’s steering solutions are used today in over 60 countries. With approximately 55 employees worldwide, Novariant generated revenues of approximately $30 million in 2014.

Completion of the transaction is expected during the summer of 2015 and is subject to a number of conditions, including receipt of a permit from the California Commissioner of Corporations following a hearing held to consider the terms of the transaction, approval of the shareholders of Novariant, approval of the shareholders of AgJunction at a Special Shareholders Meeting to be held in the summer of 2015 (the “Meeting”) and receipt of customary regulatory approvals, including the approval of the Toronto Stock Exchange.

Under the terms of the Agreement, which has been unanimously approved by the boards of directors of both companies, AgJunction shares will be issued to shareholders of Novariant in exchange for all of the shares of Novariant. After giving effect to the issuance of such AgJunction shares, AgJunction will have approximately 123.7 million fully diluted shares outstanding, of which approximately 49.5 million shares will be held by the former shareholders of Novariant, representing approximately 40% of the combined company.

Upon conclusion of the transaction, it is anticipated that directors, officers, and other insiders will hold approximately 30.6% of the combined company. This includes Novariant’s largest shareholder, Investor Growth Capital (“IGC”), an independent venture capital firm specializing in expansion-stage investments. IGC will become the largest shareholder of the combined company at approximately 15% ownership.

Strategic Rationale

This transaction will create a leading technology and innovation company, differentiated by its broad intellectual property portfolio and its ability to deliver application-specific solutions to precision agriculture customers globally.

“Novariant established itself as a pioneer in guidance and auto-steer technologies over 20 years ago”’ said Dave Vaughn, CEO of Novariant. “Most recently, Novariant has sharpened its focus on precision agriculture and has positioned its offerings to address a major shift in our industry from after-market channels to factory-installed solutions.”

“A shift like this occurs only once during the life cycle of a technology, and great companies can be created by accelerating and innovating at the right time,” added Vaughn. “At Novariant we believe this is a transformational opportunity, and AgJunction is the right partner.”

As global machine manufacturers increasingly target the integration of auto steer technologies at the factory level, the combined companies can bring advanced levels of machine automation to both current and future OEM clients faster and at lower cost.

“The combination of Novariant and AgJunction creates an exciting opportunity for our company, for our customers, and for our shareholders,” stated Rick Heiniger, President and CEO of AgJunction. “This merger extends the reach and influence with which we pursue a common passion – delivering the most accurate, innovative and reliable steering solutions in the world.”

Additional information in respect of the transaction will be forthcoming in the information circular that will be provided to AgJunction shareholders in connection with the Meeting to approve the transaction.

Headquarters and Management

Upon closing of the transaction, the combined company will have approximately 200 employees worldwide and will be headquartered at Novariant’s corporate headquarters in Silicon Valley. The combined company plans to maintain additional offices in Kansas, Arizona, Pennsylvania, Canada and Australia.

Dave Vaughn, CEO of Novariant, will be appointed CEO of the combined company, with current AgJunction CEO Rick Heiniger serving as Senior Advisor to the CEO. In addition, Wes Dittmer will continue to serve as the combined company’s CFO.

Dave Vaughn brings over 20 years of senior executive experience in precision guidance and agri-business to AgJunction. His roles include executive-level positions with Topcon Positioning Systems Inc., NovAtel Inc., Magellan and Trimble Navigation Limited. He has served on the board of directors for a number of technology corporations and has extensive professional experience in the high tech sector, including serving in an executive capacity with Apple Inc. and Hewlett-Packard.

Board Changes

Upon closing of the transaction, three Novariant directors will be appointed to the AgJunction board of directors. Current AgJunction directors Rick Heiniger and Barry Batcheller will not stand for reelection to their board positions to accommodate the incoming board appointments. Current AgJunction Chairman Michael Lang will be appointed Vice Chairman and the resulting AgJunction board will consist of the following:

  • Jon Ladd, Chairman of the Board
  • Michael Lang, Vice Chairman
  • Mark Anderson, Director
  • Paul Cataford, Director
  • Jose Suarez, Director
  • John Tye, Director
  • Dave Vaughn, Director

AgJunction’s new Chairman, Jon Ladd, has been a member of the Novariant board of directors and Senior Advisor to the CEO since 2012. Mr. Ladd is also currently Chairman of Hemisphere GNSS Inc.

He has over 30 years of development and management experience in the global GNSS and wireless sectors. Previously Mr. Ladd was CEO and Chairman of Brilliant Telecommunications prior to its acquisition by Juniper Networks and was the President and CEO of NovAtel Inc. (NASDAQ: NGPS) prior to its acquisition by Hexagon AB.

Jose Suarez serves as Managing Director for IGC. Established in 1995 IGC has invested more than $3.0 billion in over 250 companies around the world. Mr. Suarez is a member of the Novariant board of directors and represents one of the largest shareholders of Novariant. Upon the completion of the merger, IGC will become the largest shareholder in AgJunction holding approximately 15% of the issued and outstanding AgJunction shares.

Structure of the Transaction and Required Approvals

The transaction will be effected by way of a plan of merger under the laws of the State of California and is anticipated to close during the summer of 2015. Closing of the transaction is subject to, among other conditions, receipt of a permit from the California Commission of Corporations following a hearing held to consider the terms of the transaction, approval of the transaction by Novariant shareholders, approval of AgJunction shareholders to the issuance of AgJunction shares pursuant to the transaction and certain other matters related to the transaction, the receipt of all necessary regulatory and stock exchange approvals, and satisfaction of certain other closing conditions that are customary for a transaction of this nature.

Approval of the Novariant shareholders will be sought through written consent. The transaction will require the approval of Novariant’s common and preferred shareholders.

The issuance of the AgJunction shares to Novariant shareholders pursuant to the transaction will require the approval of a majority of the AgJunction shares voted in person or by proxy at the Meeting of AgJunction shareholders. It is anticipated that the AgJunction shareholder meeting will be held in the summer of 2015 following the anticipated mailing of an information circular regarding the transaction to shareholders.

The directors of each of AgJunction and Novariant have unanimously approved the transaction and resolved to recommend that their respective shareholders vote in favour of the transaction. Each of the directors and officers of AgJunction and Novariant have entered into support agreements pursuant to which each has agreed to vote their shares in favour of the transaction.

Each party has agreed to pay a non-completion fee of US$2 million to the other party in certain circumstances as set forth in the Agreement.

Complete details of the terms of the transaction are set out in the Agreement, which will be filed by AgJunction and be available for viewing under its profile at www.sedar.com on or before March 26, 2015.

PI Financial acted as an advisor to AgJunction in this transaction.

Topics: ,

Leave a Reply

One comment on “AgJunction, Novariant Announce Merger

Guidance Stories
GuidanceTrimble Launching VerticalPoint RTK for FmX, TMX-2050 Displays
December 19, 2016
Trimble announced today that it has launched a world-first, patent-pending VerticalPoint RTK system for grade control in agriculture. VerticalPoint RTK Read More
GuidanceNovAtel Launches RTK ASSIST Service
October 11, 2016
Today at Intergeo, NovAtel introduced its RTK ASSIST service. RTK ASSIST is a subscription-based service that provides users with satellite-delivered Read More
AgJunction, InfoAg 2014, Autosteer, GPS
GuidanceAgJunction, TeeJet Technologies Form Partnership
July 6, 2016
AgJunction Inc. and TeeJet Technologies, one of the world’s leading application technology providers for agriculture, have entered into a global Read More
GPS, Guidance
GuidanceDeere Launches Plethora of Precision Ag Products
June 1, 2016
Two new row guidance products available for John Deere sprayers Two new AutoTrac products are available to help row crop Read More
Trending Articles
PrecisionAg.com featured image
ProfessionalsWelcome to the Newly Enhanced PrecisionAg.com
December 29, 2016
Talk a quick look around our website and we hope you’ll notice it’s significantly different as we head into 2017 Read More
Ryan Raguse and Matthew Grassi
ProfessionalsIndustry Executives Talk New PrecisionAg Professional Brand
December 19, 2016
EFC Systems President and CEO Ernie Chappell Myriad Mobile Cofounder and Chairman Ryan Raguse Read More
PrecisionAg Professional logo
Industry NewsMeister Media Debuts PrecisionAg Professional
December 13, 2016
Agricultural technology is accelerating, and precision agriculture is gaining renewed interest across cropping systems. At the same time, growers are Read More
NDSU IoT
Sensors/IoTNew Farming Focused IoT Partnership Announced
December 13, 2016
Infiswift, an enterprise Internet of Things (IoT) platform developer, announces a partnership to develop IoT solutions with Acuitus Ag, an Read More
GVM E-Series cab
Ag Tech GlobalGlobalization And Precision Agriculture
December 7, 2016
Globalization has taken on a negative connotation in some circles in the U.S. in recent months. The lightning rod for Read More
Farmers Edge Truck
Data ManagementFarmers Edge, Trotter Fertilizer Form Partnership To Enhance VRT Programs
November 29, 2016
Farmers Edge, a global leader in precision agriculture and independent data management solutions, has partnered with Trotter Fertilizer, Nebraska’s foremost Read More
Latest News
Sonny Perdue
Business ManagementAg Tech CEOs Weigh In On Trump’s Pick For Ag Secr…
January 20, 2017
With President-Elect Donald Trump’s selection of Sonny Perdue as the new proposed Secretary of Agriculture, it brings a new set Read More
BASF Maglis Grower Tablet
EventsRetailers, Consultants Untangle Software Decision Proce…
January 19, 2017
Today, business and agronomy management software is the engine that facilitates a smooth running ag business. The next software decision Read More
Ag Weather Service
Decision Support SoftwareSciFi in Ag: Will Amazon’s Alexa Control the Fami…
January 19, 2017
*Article Notes: This monthly column takes some crazy sounding ideas and applies them to the field of Ag Tech. The Read More
Data ManagementNew Partnerhship Between AgIntegrated, CDMS, SeediQ Wil…
January 18, 2017
AgIntegrated, Inc. (AGI), CDMS, Inc. and SeediQ announce a partnership to develop, promote, and sell a single-source crop input reference Read More
Corn Field Sunset
Ag Tech GlobalAg Technology Among Focus Areas For Kohli Impact Invest…
January 18, 2017
Tej Kohli, a serial entrepreneur, global businessman and philanthropist, has announced he has earmarked an initial $25 million USD, through his Read More
Terry Griffin
Business ManagementUsing High Tech To Make Farm Decisions
January 17, 2017
Raj Khosla, professor of precision agriculture at Colorado State University, challenged farmers to think about how far the technology of Read More
Decisive Farming My Farm Manager mobile app
Ag Tech GlobalLeading Canadian Farming Co-op Brings In New Tech To Bo…
January 17, 2017
Co-op, one of the largest agricultural retailers in Western Canada, is partnering with farm management company Decisive Farming to provide Read More
Business ManagementCNH Names Danford Industry Relations Manager
January 17, 2017
Dan Danford has been named Industry Relations Manager, Precision Solutions and Telematics (PS&T), for CNH Industrial, parent company of agricultural Read More
Australian Harvest
Ag Tech GlobalAustralian Precision Agriculture Market, Forecast To 20…
January 13, 2017
Research and Markets has announced the addition of the “Australian Precision Agriculture Market, Forecast to 2020” report to their offering. Read More
Norris planter
Innovation SeriesCompelling Consultant Panel Kicks Off Next Month’s Prec…
January 12, 2017
Jeremy Wilson, Technology Specialist at CropIMS and renowned precision expert, leads a panel of top precision consultants to kick off Read More
Data ManagementProspera Selected for Top 100 Artificial Intelligence R…
January 11, 2017
CB Insights today selected Prospera to the prestigious Artificial Intelligence 100 list (“AI 100”), a select group of emerging private Read More
Business ManagementBREAKING: FAA Considering Less Restrictive Commercial D…
January 11, 2017
FAA is working toward allowing more freedom for drone operators, and at the same time is working with NASA on Read More
DronessenseFly, Agribotix Combine eBee SQ and FarmLens Offeri…
January 11, 2017
Agribotix has partnered with senseFly to offer a new combined solution for professional users. This technology solution combines the top Read More
Sentera software
DronesSentera Announces NDVI Livestream Capabilities for Doub…
January 10, 2017
Sentera today announced the upcoming release of LiveNDVI Video: livestreamed NDVI video via Sentera’s Double 4K sensor. This breakthrough technology Read More
Young Corn Field
Ag Tech GlobalEurocontrol To Commercialize Precision Agricultural Ini…
January 9, 2017
Eurocontrol Technics Group Inc., a Canadian public company specializing in the acquisition, development and commercialization of innovative test and measurement Read More
Corn Field
Data ManagementWaypoint Analytical, Highland Precision Ag Announce Str…
January 9, 2017
Waypoint Analytical (WP), based in Memphis, TN, and Highland Precision Ag (HPA), based in Mulberry, FL, are pleased to announce Read More
Western Canada Wheat field
EventsSixth Annual Precision Ag Summit Set for January 16-17 …
January 4, 2017
The 6th annual Precision Ag Summit will be held Jan. 16-17, at the North Dakota Farmers Union Conference Center in Read More
University of California Merced Professor Stefano Carpin
Hort TechRobots, People Working Together To Save Water, Enhance …
January 3, 2017
A nearly $1 million grant from the USDA is helping University of California researchers refine collaborative robotic technology that could Read More