AGCO to acquire Cimbria

by World Grain Staff
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DULUTH, GEORGIA, U.S. — AGCO, a worldwide manufacturer and distributor of agricultural equipment, announced on June 29, that it has agreed to acquire Cimbria Holdings Ltd. for approximately €310 million ($340 million) from Silverfleet Capital. Cimbria, based in Thisted, Denmark, is a leading manufacturer of products and solutions for the processing, handling and storage of seed and grain. The transaction is subject to regulatory approval and is expected to close in the third quarter of 2016.

The Danish company has four production facilities in Denmark, Austria, the Czech Republic and Italy, and employs approximately 900 people globally. Silverfleet, a European private equity firm, acquired Cimbria in April 2013 for €137 million. 

Its products and services support the cleaning, drying, storage and conveyance of grain and seed through the development, manufacture and installation of individual machines, customized systems and complete turnkey plants, as well as project management and process control consulting, AGCO said. Cimbria sales, which are expected to reach approximately $240 million in fiscal 2016, are concentrated in Western Europe with growing exposure to Eastern Europe, Africa and the Middle East.

“The acquisition of Cimbria significantly enhances our market position in the European grain handling and storage industry,” said Martin Richenhagen, AGCO’s chairman, president and chief executive officer. “Cimbria’s products are complementary to our GSI’s offerings and are recognized by its customers for their design, quality and innovation. This combination also provides significant marketing and cost saving synergies and will provide us with a global leadership position in the seed handling industry as well as further strengthen our capabilities to serve large global customers. With margins similar to GSI, the acquisition of Cimbria provides us an attractive opportunity to grow our business and expand our margins.”

Under its ownership, Silverfleet led an expansion strategy, which generated growth in revenue and profits, Silverfleet said. Cimbria expanded into high growth markets of grain-and seed-importing countries such as Egypt and other Middle Eastern countries, while previously it was predominantly focused on exporting countries. It also expanded its sales operations to cover after-sales. Operationally, Cimbria strengthened the senior management team with a number of new appointments including in its R&D, procurement and after-sales functions, Silvefleet said. In addition it improved its manufacturing efficiency, which included the opening of a new plant in the Czech Republic.

“We are delighted with the substantial growth achieved in conjunction with the management team at Cimbria,” said Gareth Whiley, partner at Silverfleet Capital who served on the Cimbria board and has responsibility for the Nordic region. “It supports our investment thesis of capitalizing on long-term growth trends in the food and agricultural manufacturing sectors and investing in winning companies.”

This is the latest in a series of acquisitions by AGCO in the last several years. It purchased Farmers Automatic, Lauer, Germany, a poultry equipment manufacturer in 2015; Intersystems, Omaha, Nebraska, U.S., a material handling company, in 2014; and GSI, Assumption, Illinois, U.S., a manufacturer of grain storage and protein production systems, in 2011.

AGCO’s products are sold through five core machinery brands, one of which is GSI, a brand that operates in Cimbria’s sector. AGCO’s products and solutions are distributed globally through a combination of approximately 3,100 independent dealers and distributors in more than 140 countries.

Rabobank is acting as financial advisor and Herbert Smith Freehills is serving as legal advisor to AGCO. Silverfleet was advised by Baird (corporate finance), Travers Smith and Accura (legal), Deloitte (financial and tax due diligence) and Roland Berger (commercial due diligence). 
 
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