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* CNH to pay $58 per share, offering a 33.6% premium
* Proposed acquisition marks CNH's largest M&A deal
* Deal expected to close in Q4 this year
* CNH to spin off trucks, buses, engines in early 2022
* CNH shares up 0.7% at 1350 GMT
(Adds comments form analyst call, details)
By Giulio Piovaccari
MILAN, June 21 (Reuters) - CNH Industrial has struck a $2.1
billion deal to buy Raven Industries to bolster its agricultural
equipment business, as the Italian-American vehicle maker
prepares to spin off its truck, bus and engine operations.
Raven shares rose by 50% in New York early Monday,
lifting its market capitalization into line with the terms
proposed by CNH Industrial, whose Milan-listed stock turned
slightly positive after initially falling by as much as 5.6%.
CNH Industrial is the world's second largest
agricultural equipment maker after John Deere, operating under
the New Holland, Case IH and Steyr brands.
"Precision agriculture and autonomy are critical components
of our strategy," CNH Industrial Chief Executive Scott Wine said
of the acquisition of Raven, which also produces
high-performance specialty films as well as aerospace and
defense solutions.
Wine described the proposed purchase as "truly
transformative" and left the door open to more acquisitions to
expand what it is able to offer in the businesses it retains.
"We will absolutely consider strategic acquisitions if we
need to grow faster or more profitably," he told analysts.
CNH Industrial will pay $58 per share for the U.S.
agriculture technology company, a 33.6% premium to Raven's
four-week volume-weighted average stock price, giving it an
enterprise value of $2.1 billion, the companies said.
The deal is expected to generate around $400 million of
run-rate revenue synergies by 2025, resulting in $150 million of
incremental core profits (earnings before interest, taxes,
depreciation and amortization), they added.
Analysts at Bestinver Securities said the news was positive
as Raven's "cutting-edge" technology in the agriculture industry
would further enhance CNH Industrial capabilities.
"However, we point out that the acquisition came at cost,"
they said in a note.
CNH Industrial said it would complete early next year a plan
to spin off and separately list its lower-margin Iveco truck and
bus units along with its FPT engine division, to boost asset
values and streamline its businesses.
It will also retain its construction equipment business
after the spin-off.
The Raven buy, which marks the largest M&A deal for CNH
Industrial since it was formed in 2013, requires approval from
Raven's shareholders. It is expected to close in the fourth
quarter and will be funded with CNH's available cash, the
companies said in a joint statement.
CNH Industrial, which is controlled by Italy's Agnelli
family through its holding company Exor, said it did
not expect the proposed acquisition to have any impact on its
financial forecasts for this year, including cash flow.
Barclays and Goldman Sachs were financial advisors to CNH
Industrial in the deal, while JPMorgan Securities advised Raven
Industries.
(Additional reporting by Stephne Jewkes in Milan and Kanishka
Singh in Bengaluru;
Editing by Kim Coghill, David Goodman, Emelia Sithole-Matarise
and Alexander Smith)
