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
Farmers Edge Truck
AmericasFarmers Edge, Raven Announce Collaboration Agreement
May 9, 2018
Raven Industries and Farmers Edge announced today a marketing and collaboration agreement. The two companies are working together to develop Read More
Trimble-GFX-750-Display
GuidanceTrimble Introduces GFX-750 Display System with Advanced Guidance Controller
October 30, 2017
Trimble has introduced the Trimble GFX-750 display system for agriculture applications. The display system comes with the simple-to-install, roof-mounted NAV-900 Read More
Beacon
GuidanceDigiFarm VBN Announces Supplier Agreement with AGCO
September 7, 2017
DigiFarm VBN LLC, an agricultural technology company, announces it has signed a supplier agreement with AGCO Corp., a world-leading manufacturer Read More
Young Corn Field
GuidanceOutback Guidance Launches Hands-Free Farming Campaign at Farm Progress Show
August 30, 2017
Outback Guidance, a leader in automated steering and advanced precision farming solutions, and a part of AgJunction, Inc., is launching Read More
Trending Articles
ISPA-Yoshua-Bengio
EventsHighlights from the 14th International Conference on Precision Agriculture
July 9, 2018
The 14th International Conference on Precision Agriculture (ICPA) presented by the International Society of Precision Agriculture (ISPA) was held in Montreal, Read More
Topcon X30 Console in cab
EventsAssociation Seeks Definitive Definition of “Precision Agriculture” — What’s Your Vote?
July 2, 2018
More than two-dozen definitions of precision agriculture have been identified through the years — but which is the best and Read More
AmericasRaven Name to Grace New South Dakota State University Facility
June 27, 2018
According to a press release issued by the company, Raven Industries was recognized today in the naming of South Dakota Read More
dropcopter
DronesNew York Apple Orchard Claims World First in Pollination by Drone
June 18, 2018
Beak & Skiff Apple Orchard in LaFayette, NY, is the first orchard in the world to use drones to pollinate Read More
JDandPessl
Sensors/IoTJohn Deere, Pessl Instruments Team Up to Create Opportunities
June 18, 2018
John Deere is best known for its line of tractors, combines, sprayers, and implements. However, in an effort to help Read More
Matt-Waits-featured
Decision Support SoftwareSST’s Matt Waits: Innovative Data Solutions Key to Transforming Global Agriculture
May 31, 2018
Proagrica, part of RELX Group, earlier this year acquired U.S.-based precision agriculture solutions company, SST Software, in a move set Read More
Latest News
Data ManagementInfoAg News: Farmobile Launches DataEngine, Streamlines…
July 17, 2018
Busy times these days out in Overland Park Leawood, KS, for ag data startup Farmobile, as they continue to – Read More
Agrible
Grower Services & SolutionsNutrien Drops $63 Million to Acquire Agrible
July 16, 2018
Nutrien announced today that it has entered into a definitive agreement to acquire Agrible for total consideration of $63 million, Read More
Industry NewsFarmobile Acquires Prime Meridian, Taps Cubbage as New …
July 13, 2018
Farmobile today announced an agreement to acquire the assets of Prime Meridian, a precision agriculture data management company based in Read More
group-photo
DronesPrecision Agriculture Takes Flight at North Carolina St…
July 13, 2018
Take a walk into the Suggs Laboratory for Precision Agriculture and Machine Systems and it’s hard not to be impressed, Read More
Skeketee-IC-Weeder
DronesAutomated Weeders Have Arrived in Vegetable Fields
July 12, 2018
The vegetable production areas of the Central Coast of California have lifted vegetable cultivation to a high art, writes Richard Read More
AgJunction, InfoAg 2014, Autosteer, GPS
Industry NewsAgJunction Settles with Raven in Patent Infringement Su…
July 12, 2018
AgJunction Inc., a leader in advanced guidance and autosteering, has settled a patent infringement lawsuit it filed against Raven Industries, Read More
Retailer-Grower-tablet
Business ManagementTaking Measure of the Precision Agriculture Program: 6 …
July 12, 2018
In the overall agriculture market, the rhetoric surrounding emerging technology over the past half-decade has been nothing short of breathless. Read More
raven-slingshot-job-generator-job-sync-1
Industry NewsNew Raven Slingshot Advancements Will Help Save Time, R…
July 11, 2018
Raven Industries, Inc. has announced several new services available on the Slingshot and Viper 4 platforms: Job Generator and Job Read More
Onsite-logo
Industry NewsAgIntegrated Acquires Exclusive Licence to Satshot’s Im…
July 11, 2018
AgIntegrated, Inc. (AGI), a leader in precision ag data integration and software development, and Satshot, a leader and pioneer in Read More
Australian Harvest
Australia/New ZealandAustralian Agritech Plants Blockchain for Efficiency
July 11, 2018
“Agritech” at one time would have meant new equipment such as tractors and combine harvesters, but today it refers to Read More
Tomato-crop-India
AsiaIndia: Using Artificial Intelligence for the Good of Fa…
July 11, 2018
After graduating from IIT-Madras, the first thing that Vivek Rajkumar did was to buy four acres near Thiruvananthapuram and start Read More
BrightFarms
Industry NewsForbes List of Innovative Ag-Tech Companies Includes Gr…
July 9, 2018
Forbes magazine recently posted a list of the 25 most innovative ag-tech startups in 2018, which includes a few companies Read More
AmericasNutrien Ag Solutions Brand, New Digital Platform Launch…
July 9, 2018
Nutrien (formerly Crop Production Services) has officially rebranded its retail business to Nutrien Ag Solutions, aligning the company’s retail operations Read More
ISPA-Yoshua-Bengio
EventsHighlights from the 14th International Conference on Pr…
July 9, 2018
The 14th International Conference on Precision Agriculture (ICPA) presented by the International Society of Precision Agriculture (ISPA) was held in Montreal, Read More
TerrAvion
Industry NewsTerrAvion Integrates Aerial Imagery with John Deere Ope…
July 6, 2018
TerrAvion, Inc., a large volume provider of aerial imagery to agriculture, has announced an integration to allow TerrAvion’s aerial imagery Read More
Farmer-Tablet
Data ManagementAgriculture’s Next Breakthrough: New Technologies…
July 3, 2018
We live in an exciting time in agriculture. Not only is technology advancing rapidly, but the understanding and comprehension of Read More
Nebraska-Storm
Precision IrrigationNotes from the Field: A Look at Irrigation Management P…
July 2, 2018
One of the things I love most about my work is making periodic treks into the field – more often Read More
Topcon X30 Console in cab
EventsAssociation Seeks Definitive Definition of “Preci…
July 2, 2018
More than two-dozen definitions of precision agriculture have been identified through the years — but which is the best and Read More