Canadian harvesting equipment company MacDon is set to join the ag arm of industrial equipment and parts manufacturer Linamar.
Guelph-based Linamar Corp., which markets the Harvestec brand of corn harvesting headers in North America, on Thursday announced a “definitive” agreement to buy 100 per cent of Winnipeg-based MacDon and its group of companies for $1.2 billion.
The deal, to be financed mainly through a new term loan facility also announced Thursday, is expected to close in the first quarter of 2018 pending the usual regulatory approvals.
The purchase price is near what MacDon was reported to be seeking as far back as 2013, when other media outlets quoted unnamed sources as saying the Winnipeg company had enlisted Goldman Sachs to find a buyer.
Given its own “highly complementary” stake in harvesting equipment — which also includes the Oros brand of corn and sunflower headers it markets in Europe — Linamar said it expects to see “modest synergies” from the deal.
Once the deal closes, MacDon, which makes windrowers, draper headers, pull-type mowers and pickup headers, will merge with Linamar’s existing agriculture harvesting business, which is based in Hungary.
MacDon, which also operates offices in the U.S., Australia, Russia and Brazil, set up its own European sales and distribution office in Wiesbaden, Germany in October and opened a major new parts distribution centre in Winnipeg last year.
Linamar said the MacDon deal will allow it to offer a full lineup of grain and hay harvesting equipment and to expand its ag platform in “new and underserviced markets” worldwide.
“As it expands, MacDon will benefit from Linamar’s established manufacturing footprint in Asia and Europe, along with employing best practices from both Linamar and MacDon,” Linamar said in a release.
MacDon’s sales network of about 1,400 dealers and distributors worldwide gives it a “major competitive advantage in the industry,” Linamar said.
Linamar CEO Linda Hasenfratz described the deal Thursday as “a truly once-in-a-lifetime opportunity to move our agriculture business into a market-leading position while providing meaningful diversification to the end markets we serve.”
Linamar, she said, sees the long-term growth fundamentals for the ag industry as “very strong given the growing and developing global population” with the market in its “early stages of cyclical recovery.”
MacDon, she said, “will be the centrepiece of our agriculture business, which includes our existing European corn header business, highly complementary to MacDon products. We get diversification, innovation, growth and a solid deal; we couldn’t be happier.”
Linamar’s businesses also include machining, assembly and forging, focused mainly on engine, transmission and driveline components, plus its Skyjack brand of scissor lifts, booms and telehandlers.
MacDon started in 1949 as Killbery Industries, which made sprayers, grain augers, discer seeders, cultivators and manure spreaders. The company then launched one of the first self-propelled windrowers, in 1951.
The company was renamed MacDon following its acquisition by the MacDonald family in 1971, and expanded into the U.S. market in 1986 through its own dealer network.
MacDon, which also has a deal to manufacture John Deere-branded windrowers for the U.S. ag equipment giant, maintains a major manufacturing plant in Winnipeg with one of the largest powdercoat paint systems in North America. — AGCanada.com Network