The agricultural equipment maker
) announced that it has agreed to acquire Intersystems Holdings
Inc. and subsidiary (Intersystems). This will expand the company's
material handling capabilities. Financial terms of the transaction
were not disclosed.
Omaha-based Intersystems is a leading manufacturer of commercial
material handling solutions. The buyout will help AGCO to expand
its grain handling and storage business in the fast growing
off-farm segment. Intersystems products are well appreciated by its
customers, including feed mills, inland grain terminals and sea
port facilities, which will also assist AGCO's growth.
The acquisition is in sync with AGCO's acquisition, expansion and
modernization plans and matches perfectly with its GSI brand. AGCO
acquired GSI Holding Corp. (GSI), a leading manufacturer of grain
storage and protein production systems in Nov 2011.
In the first quarter of 2014, GSI sales were up about 10% which
aided North America segment sales to rise 3.7% year over year to
$647.5 million in the quarter. However, AGCO's total sales
decreased 2.9% year over year to $2.33 billion in the quarter.
AGCO reiterated its full-year 2014 earnings per share of
approximately $6.00. Net sales guidance has also been maintained in
the range of $10.8-$11.0 billion. AGCO is set to benefit from
investments in production facilities and higher technology
The company projected GSI sales to be up approximately 10% for the
full year of 2014 compared with 2013, with most of the growth
occurring outside the U.S. In addition, the global population
growth and changing trends in diet are generating demand for
additional grain storage and protein production capacity
facilitating growth in the longer term. However, the political
unrest in Ukraine and lower protein sales in the U.S. remain
matters of concern for GSI.
Duluth, GA-based AGCO is a global leader in the design, manufacture
and distribution of agricultural machinery. It supports productive
farming through a wide range of tractors, combines, hay tools,
sprayers, forage equipment, tillage, implements, grain storage and
protein production systems as well as other related replacement
Currently, AGCO has a Zacks Rank #3 (Hold). Some better-ranked
stocks in the same sector include
AO Smith Corp.
Columbus McKinnon Corporation
). All these carry a Zacks Rank #2 (Buy).
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