Vancouver, B.C. — Seeding and planting technology innovator Clean Seed Capital Group Ltd. has signed an agreement to strategically acquire leading U.S. planting equipment manufacturer Harvest International, uniting the two family-run companies in a transformational event for the future of precision agriculture technology in North America.
Executives from both companies will be discussing the partnership and what it means for farmers today at the Ag in Motion outdoor farm show in Saskatoon, Saskatchewan, Canada.
“Following the granting of Clean Seed patents in the United States, we sought to find a synergistic industry partner with respected roots in the U.S. who would position us for accelerated growth and innovation,” says Graeme Lempriere, president and CEO of Clean Seed.
“Their industry experience, proven technology and aligned core values made Harvest International the perfect fit. We collectively recognize the significant opportunities to cross-pollinate our robust and industry leading intellectual property portfolios in the North American seeder and planter markets.”
Clean Seed, creators of the revolutionary CX-6 SMART Seeder, is already disrupting the Canadian seeder market with their leading-edge technology. The CX-6 boasts simultaneous control of up to six products above each opener, effectively creating an unrivaled level of precision in modern, no-till seeding.
In addition to a strong lineup of industry leaders on their management team and a robust technology pipeline, Harvest International has a sophisticated 75,000 square foot manufacturing facility and head office in Storm Lake, Iowa.
“Harvest International has a proud history of farmer-focused innovations in agricultural manufacturing and intellectual property development,” says Byron Friesen, president of Harvest International. “This acquisition allows us to grow and join forces with a like-minded tech-forward company to deliver innovations not yet seen by North American farmers.”
Clean Seed will satisfy the purchase price of the Acquisition by way of: (i) the issuance of 8,000,000 Clean Seed common shares at closing, which will be subject to the standard four month hold period under applicable securities laws and TSX Venture Exchange (“TSX-V”) rules; (ii) a cash payment at closing of $2,580,718 USD, subject to customary closing adjustments; (iii) the assumption or restructuring at closing of notes payable of Harvest International and an affiliate aggregating approximately $7,519,282 USD; and (iv) future additional cash payments of up to $6,000,000 USD, based on Harvest International’s achievement of certain earn-out performance milestones, which will be paid out at the earliest in $2,000,000 USD annual installments over a three year period from December 31, 2019.The Company has initiated discussions with tier one Canadian financial institutions specializing in agriculture to provide structured debt financing to facilitate the Acquisition.
On closing of the Acquisition, Byron Friesen, President and CEO of Harvest International, and other key Harvest International management will continue in their senior management roles. Byron will also be appointed to Clean Seed’s board of directors.
Closing of the Acquisition is subject to a number of conditions including: (i) obtaining all necessary regulatory approvals, including the approval of the TSX-V; (ii) completion of satisfactory due diligence; (iii) Clean Seed having obtained financing necessary to pay the closing cash portion of the purchase price; and (iv) other conditions typical of a transaction of this nature. Clean Seed anticipates closing the Acquisition in late 2018.
The acquisition supports Clean Seed’s mission to remain at the forefront as pioneers of the digital age of agriculture, facilitating real progress for the farmer and food production as a whole. Through innovations in seeding and planting technology, Clean Seed aims to assist farmers in achieving more accurate seed and input placement, more efficient operations and increased yields.
“This strategic acquisition is best described as a merger of two cutting-edge technology pioneers of the agricultural industry,” Lempriere says. “We look forward to accessing an extensive U.S. market and community as well as executing on future plans to bring proven planter technology north into Canada. The combination our of strong intellectual properties and innovative technologies opens the door to provide significant marketplace advantage for Clean Seed.”