June 20, 2021

Raven Industries, one of Sioux Falls’ biggest homegrown business success stories, is being acquired by a London-based multinational corporation.

CNH Industrial N.V. announced in a news release it has entered into an agreement to acquire 100 percent of Raven’s capital stock, valuing it at $2.1 billion, or $58 per share, which represents a 33.6 percent premium to the four-week volume-weighted average stock price. In the last 52 weeks, Raven stock has ranged from a low of $19.84 to a high of $47.43.

Raven stock closed Monday at $57.65 per share.

The transaction will be funded with available cash on hand of CNH Industrial. Closing is expected to occur in the fourth quarter of 2021, subject to closing conditions, including approval of Raven shareholders and receipt of regulatory approvals.

In a statement the companies said the acquisition builds on a long partnership and “will further enhance CNH Industrial’s position in the global agriculture equipment market by adding strong innovation capabilities in autonomous and precision agriculture technology.”

CNH Industrial’s global headquarters in the UK, but it is largely owned by the Italian investment company Exor. The company is listed on the New York Stock Exchange and on Borsa Italiana. It is incorporated in the Netherlands.

Through its various businesses, CNH Industrial designs, produces, and sells agricultural equipment and construction equipment including Case IH and New Holland brand families, trucks, commercial vehicles, buses, and special vehicles, in addition to powertrains for industrial and marine applications.

Raven has three divisions, including its applied technology division, which focuses on precision agriculture; engineered films, which focuses on high-performance specialty films; and Aerostar, which works in the aerospace industry.

“Precision agriculture and autonomy are critical components of our strategy to help our agricultural customers reach the next level of productivity and to unlock the true potential of their operations,” said Scott Wine, CEO of CNH Industrial in a statement.

“Raven has been a pioneer in precision agriculture for decades, and their deep product experience, customer driven software expertise and engineering acumen offer a significant boost to our capabilities. This acquisition emphasizes our commitment to enhance our precision farming portfolio and aligns with our digital transformation strategy. The combination of Raven’s technologies and CNH Industrial’s strong current and new product portfolio will provide our customers with novel, connected technologies, allowing them to be more productive and efficient.”

Raven was founded in 1956 by a group of former General Mills employees who wanted to make high-altitude balloons, first selling them as research balloons to the U.S. Navy. It’s headquartered in downtown Sioux Falls. It evolved into the various business lines along the way and recently has identified autonomous agriculture products as key to its future growth.

“Our board and management are excited about this partnership and what it means for our future,” said Dan Rykhus, Raven’s president and CEO.

“For 65 years, our company has been committed to solving great challenges. Part of that commitment includes delivering groundbreaking innovation by developing and investing in our core capabilities and technology. By coming together with CNH Industrial, we believe we will further accelerate that path as well as bring tremendous opportunities and value to our customers — once again fulfilling our purpose to solve great challenges. Our relationship with CNH Industrial has expanded over decades, and we have a deep respect for one another and a shared commitment to transform agriculture practices across the world. We look forward to CNH Industrial leveraging the Raven talent and culture, as well as the Sioux Falls community, as part of their vision and future success.”

In the statement, CNH said it believes Raven’s engineered films and Aerostar divisions “represent attractive independent businesses with excellent near and long-term potential,” it said. “Accordingly, CNH Industrial plans to undertake a strategic review of each business to best position them for future success and maximize shareholder value.”

The deal is expected to generate $400 million in run-rate revenue synergies by calendar year 2025, resulting in in $150 million of incremental EBITDA.

“Raven Industries’ capabilities, innovation culture, entrepreneurial spirit and engineering talent are impressive and will continue to thrive as part of the CNH Industrial family. Sioux Falls is and will continue to be a true center of excellence,” Wine said.

“We are incredibly excited to collaborate in bringing our customers more integrated precision and autonomous solutions, not only to improve productivity and profitability, but also promote more sustainable solutions and environmental stewardship. Together, our teams will create a stronger business for our employees, dealer network, and customers, enabling us to shape the future of agriculture, augment our world-leading sustainability credentials, and maximize our growth opportunities.”