American Vanguard Corporation AVD announced that its fully-owned subsidiary AMVAC-Chemical Corporation completed a technology investment and licensing agreement with Clean Seed Capital Group Limited.
Notably, the deal involves a minority equity investment in Clean Seed. Additionally, the deal includes a worldwide royalty-bearing licensing arrangement to Clean Seed-patented variable-rate technologies, which is currently used in Clean Seed Smart Seeder and Smart Planter platforms.
Per management, through the agreement, the company is widening its intellectual property in the fast-growing precision agriculture sector. Notably, AMVAC-Chemical developed the most sophisticated one-pass prescription application system through the Simpas prescriptive application equipment system for the application of multiple low-rate, in-furrow products, while row-planting.
The partnership is expected to provide American Vanguard with a highly advanced, variable-rate platform, with leading edge sensor technology, access to drill-seeded crops and further extend its reach in the Canada marketplace. Reportedly, this also increases the company’s growth initiative for Simpas.
American Vanguard’s shares are down 20.9% over a year compared with the 33.1% decline of the industry it belongs to.
On the fourth-quarter earnings call, the company stated that it expects its global revenues for 2020 to rise at a low-double-digit rate, assuming minimal disruption in trade and supply from the coronavirus outbreak and a return to more normal weather patterns. This is expected to be supported by higher corn acreage in the United States, renewed availability of bromacil herbicides, product introductions and growth in American Vanguard’s Latin America businesses.
American Vanguard Corporation Price and Consensus