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CNH Industrial (CNHI) Acquires Augmenta for Its Smart Sprayer

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CNH Industrial has acquired its strategic partner Augmenta to expedite the growth of their Sense & Act Technology. The investment is aimed at benefiting their customers, who are mostly farmers. Farmers spray crop protection solutions before and after harvest. Sense & Act technology uses sensors to detect data during the spraying process. This data is then used to precisely direct and regulate spray volume through selective spraying capabilities.

“Our work with Augmenta has brought increasing benefits to our customers’ operations. What began as a minority investment in their potential, now culminates in us adding this proven tech excellence directly to our sprayer offering,” said Derek Neilson, President Agriculture at CNH Industrial. “This is an important development for our Agriculture business that will further support our dealers by differentiating our equipment through value-added technology.”

Augmenta develops multispectral cameras and software that are used to monitor the machine’s operating environment and control the spraying process. This results in a higher yield for the customers and improves sustainability by cutting down on the use of chemicals and fertilizers. This smart and innovative technology reduces application time, costs and efforts.

Augmenta will retain its existing employees and offices in the United States and Greece and operate under the Raven brand. The enterprise value for this acquisition is $110 million, which is subject to customary adjustments. The acquiring company held 10.5% of the minority stake in the business before the announcement of the transaction. The transaction will be funded with cash on hand and is expected to close in the first quarter of 2023.

Last year, CNH Industrial's engineering expertise, coupled with Raven's technology, helped the Agriculture segment churn out the highest profits in more than a decade. The cutting-edge technology provided by this new acquisition is expected to boost demand for the high-end product. This buyout will help CNHI move closer to its target of achieving $1 billion in Precision AG sales this year.

Zacks Rank & Key Picks

CNHI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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Deere is the world’s largest producer of agricultural equipment, manufacturing agricultural machinery since 1837 under the iconic John Deere brand. The Zacks Consensus Estimate for DE’s 2023 sales and earnings imply year-over-year growth of 13.72% and 30.88%, respectively.

AGCO is a leading manufacturer and distributor of agricultural equipment and related replacement parts. The Zacks Consensus Estimate for AGCO’s 2023 sales and earnings imply year-over-year growth of 11.09% and 8.94%, respectively.

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