- Deere establishes leadership position in road construction
equipment.
- Wirtgen chooses Deere to continue legacy of customer focus and
innovation.
- Deere adds five premium brands to construction equipment
line-up with no product overlap.
MOLINE, Ill., June 1, 2017 /CNW/ -- Deere & Company
(NYSE: DE) has signed a definitive agreement to acquire the Wirtgen
Group, a privately-held international company that is the leading
manufacturer worldwide of road construction equipment.
The purchase price for the equity is EUR
4.357 billion in an all-cash transaction. The total
transaction value is approximately EUR
4.6 billion (USD 5.2
billion based on current exchange rates), including the
assumption of net debt and other consideration. The Wirtgen Group
had sales of EUR 2.6 billion in the
year ending December 31, 2016. Deere
expects the transaction to be accretive to earnings per share and
currently expects to fund the acquisition from a combination of
cash and new equipment operations debt financing. Detailed
financial information concerning the transaction is included in an
investor presentation available at
www.JohnDeere.com/events-and-presentations.
Headquartered in Germany, the
Wirtgen Group has five premium brands across the entire road
construction sector spanning milling, processing, mixing, paving,
compaction and rehabilitation. Wirtgen's highly complementary
product portfolio enhances Deere's existing construction equipment
offering and establishes Deere as an industry leader in global road
construction. The Wirtgen Group has a global footprint with
approximately 8,000 employees and sells products in more than 100
countries through a large network of company-owned and independent
dealers.
"The acquisition of the Wirtgen Group aligns with our long-term
strategy to expand in both of John Deere's global growth businesses
of agriculture and construction," said Samuel R. Allen, Deere & Company Chairman
and Chief Executive Officer. "Wirtgen's superb reputation, strong
customer relationships and demonstrated financial performance are
attractive as we expand the reach of John Deere construction
equipment to more customers, markets, and geographies."
Max Guinn, President of Deere's
Worldwide Construction & Forestry Division, said, "This
transaction enhances our global distribution options in
construction equipment and enhances our capabilities in emerging
markets. Spending on road construction and transportation projects
has grown at a faster rate than the overall construction industry
and tends to be less cyclical. There is recognition globally that
infrastructure improvements must be a priority and roads and
highways are among the most critical in need of repair and
replacement."
Stefan Wirtgen, Managing Director at Wirtgen, said, "The Wirtgen
Group has a legacy of technology and innovation with market-leading
products and a strong focus on the customer. As we looked to the
future, we specifically chose Deere as the buyer because of our
long-held respect for the organization and our full confidence that
Deere is dedicated to the ongoing success of the Wirtgen Group and
our employees worldwide."
Jürgen Wirtgen, Managing Director at Wirtgen, added, "Our
company's strength and success comes from dedicated employees who
are focused on helping customers succeed in the road construction
industry. We believe this transaction allows the company to be
successful well into the future - independent of our family
ownership."
Deere plans to maintain the Wirtgen Group's existing brands,
management, manufacturing footprint, employees and distribution
network. The combined business is expected to benefit from sharing
best practices in distribution, customer support, manufacturing and
technology as well as in scale and efficiency of operations.
The transaction has been approved by Deere's Board of Directors.
The purchase is subject to regulatory approval in several
jurisdictions as well as certain other customary closing
conditions. The companies said they expect to close on the
transaction in the first quarter of Deere's 2018 fiscal year.
Transaction advisors included Citigroup as exclusive financial
advisor to Deere, Linklaters LLP as deal legal counsel, Kirkland
& Ellis LLP as securities legal counsel and EY as accounting
and tax advisor. The Boston Consulting Group served as a strategic
advisor.
Deere & Company will hold a conference call for investors
regarding the transaction at 10 AM ET
on June 1, 2017. The call can be
accessed at www.JohnDeere.com/events-and-presentations. An archived
version of the call will be available shortly after its
conclusion.
The WIRTGEN GROUP (www.wirtgen-group.com) is an internationally
operating group of companies in the construction machinery sector
incorporating the traditional product brands: WIRTGEN, VÖGELE,
HAMM, KLEEMANN, BENNINGHOVEN, and CIBER. As a technological leader,
the Wirtgen Group offers its customers mobile machine solutions for
road construction and road rehabilitation and plants for mining and
processing minerals or recycling material and for the production of
asphalt.
Deere & Company (www.JohnDeere.com) is a world
leader in providing advanced products and services and is committed
to the success of customers whose work is linked to the land -
those who cultivate, harvest, transform, enrich and build upon the
land to meet the world's dramatically increasing need for food,
fuel, shelter and infrastructure. Since 1837, John Deere has
delivered innovative products of superior quality built on a
tradition of integrity.
Safe Harbor Agreement
Statements in this release contain forward-looking information
related to Deere, Wirtgen, and the Acquisition that is based on
current expectations and involves substantial risks and
uncertainties that could cause actual results, performance, events,
or transactions to differ materially from those expressed or
implied by such statements.
Forward-looking statements in this release include, among other
things, statements about Deere and Wirtgen's plans, objectives,
expectations and intentions; the financial condition, results of
operations and business of Wirtgen; the anticipated timing of
closing of the Acquisition; the potential benefits of the proposed
Acquisition; and the anticipated operating synergies. Risks and
uncertainties include, among other things, risks related to the
satisfaction of the conditions to closing the acquisition
(including the failure to obtain necessary regulatory approvals) in
the anticipated timeframe or at all, risks that the expected
benefits from the proposed acquisition will not be realized or will
not be realized within the expected time period; the risk that the
businesses will not be integrated successfully; significant
transaction costs; unknown or understated liabilities; other
business risks, including the effects of industry, market, general
economic, political or regulatory conditions; future currency
exchange and interest rates; changes in tax and other laws,
regulations, rates and policies; and future business combinations
or disposals. In addition, actual results, performance, events and
transactions, are subject to other risks and uncertainties that
relate more broadly to Deere's overall business, including those
more fully described in Deere's filings with the U.S. Securities
and Exchange Commission ("SEC") (including, but not limited to, the
factors discussed in Item 1A. Risk Factors of Deere's most recent
annual report on Form 10-K and quarterly reports on Form 10-Q). In
light of these risks, uncertainties, and other factors, you are
cautioned not to place undue reliance on the forward-looking
information. Deere, except as required by law, undertakes no
obligation to update or revise the forward-looking statements,
whether as a result of new developments or otherwise.
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SOURCE Deere & Company