Trimble, AGCO To Form JV

(RTTNews) - Scientific & Technical Instruments maker Trimble Inc. (TRMB) announced on Thursday that it has entered into a definitive agreement with aggrotech company AGCO Corp. (AGCO) to form a joint venture.

Under the deal, Trimble expects around $3 billion in transaction value from pre-tax cash proceeds. The firm will also have a 15 percent stake in the joint venture.

As per the terms of the joint venture, Trimble will contribute its precision agriculture business excluding certain Global Navigation Satellite Systems, and will receive $2 billion in pre-tax cash proceeds.

AGCO on the other hand will contribute its JCA Technologies business, and the parties will enter into a long-term supply agreement where Trimble will provide the JV with key GNSS and guidance technologies. They will also enter into a Technology Transfer and License Agreement.

The scientific instrument maker is also estimating that it would generate around $65 million of revenue and approximately $15 million of Adjusted EBITDA from the Supply Agreement.

According to the company, Trimble's precision agriculture business is expected to generate adjusted EBITDA of approximately $185 million, and revenues of around $535 million for the fiscal 2023.

The transaction is expected to close in the first half of 2024.

In pre-market activity, shares of Trimble are trading at $50.50, up 2.62% on Nasdaq and shares of AGCO are trading at $118.20, up 0.55% on the New York Stock Exchange.