Deere acquires stake in U.S. leader in high-clearance sprayers

March 29 (Reuters) - Deere & Co DE.N said on Tuesday it
has acquired a majority stake in Hagie Manufacturing, allowing
the farm and construction machinery manufacturer to enter the
high-clearance sprayer market.
Deere does not currently produce a "high-clearance" sprayer
which allows farmers to spray fields with fertilizers and
pesticides later in the growing season.
Hagie, a leading U.S. crop sprayer manufacturer, employs
about 400 people at its Clarion, Iowa manufacturing facility. It
will continue to make sprayers under the Hagie brand but with no
dealerships, the company will have access to Deere's global
customers.
"It is notable that Hagie basically put itself on sale,
because they had a financial advisor involved," said Jim
Corridore, analyst at S&P Global Market Intelligence.
NCP, Inc, a Des Moines, Iowa investment bank was the
exclusive financial advisor to Hagie. Neither Deere nor NCP
would comment on the size of the deal.
"The fact that they were looking to get an investor
involved, they probably needed the funds given how bad the
sector has been and for how long it has been bad," Corridore
said.
The joint venture is another sign of consolidation in the
agriculture sector as the U.S. farm economy enters its
third-straight down year.
Deere and other agriculture equipment manufacturers have
continued to invest millions in acquisitions, research and
development even as demand for farm equipment and machinery
tapers off in the wake of the weakest U.S. farm economy in 30
years.
In November, Deere said it would purchase Monsanto (NYSE:MON) Co's
MON.N Precision Planting farm equipment business and run it as
a independent subsidiary. The farm machinery market has moved
more toward "precision agriculture," a process that allows
farmers to measure and manage precise amounts of inputs, such as
seed, fertilizer and pesticide, in an effort to keep costs low.
ID:nL3N12Y5C3
The agreement between Hagie and Deere allows Deere to add
precision technology to Hagie sprayers.
Hagie's sales and service will be integrated into Deere's
global distribution channel over the next 15 months, a Deere
statement said.
Due to slowed agriculture equipment sales in the wake of the
sluggish farm economy, Deere has already announced hundreds of
layoffs from its own facilities. ID:nWNAB0ABFO ID:nWNAB0A6IA
"We are encouraging our independent dealers to consider
employing Hagie field staff for their expertise in high
clearance sprayers," a Deere spokesperson said.
Deere's shares were up 0.87 percent at $80.26 in afternoon
trade. The Dow Jones Industrial Index .DJI was 17586.96, up
0.29 percent.