November is proving to be a big month for deals at AGCO Corp. as the farm equipment firm built on acquisitions moves into high gear. So far, executives have agreed to spend almost $175 million on two acquisitions in Europe and a sum yet to be disclosed in buying an interest in some leading North American tillage and seeding product lines.

None of the deals are related but all emphasize AGCO’s desire to expand and strengthen its product portfolio across the board — and across the world.

In Europe, AGCO has agreed to an $89 million deal to acquire the 50% of Italian harvesting equipment manufacturer Laverda that it does not already own. It also plans an $85.6 million deal buying Sparex, a UK-based global supplier of tractor replacement parts and accessories.

Both deals are subject to approval by anti-trust authorities; but there are no such constraints on plans to form a joint venture with Amity Technology of Fargo, N.D.

This deal will involve buying a 50% stake in selected Amity, Wil- Rich and Wishek tillage tools and air seeders. The resulting venture will develop, manufacture and distribute products sold under those existing brand names and selected AGCO brands.

Seeding & Tillage. Regarding the proposed deal, which so far amounts to a letter of intent signed by the two parties, AGCO Chairman & CEO, Martin Richenhagen, says it underlines the corporation’s strategy of expanding and improving its product offering to the professional farming sector worldwide.

“The Amity, Wil-Rich and Wishek products have a strong track record for innovative equipment that improves the productivity of farmers,” he says. “We believe the combination of Amity Technology’s product innovation with AGCO’s worldwide distribution resources will create a successful alliance. 

Amity Technology was formed in 1996 after Case Corp. bought the Concord product line from owners Howard and Brian Dahl. They acquired Wil-Rich in 2001, along- side entrepreneur Mike Bullingerand current general manager Victor Klosterman.

Terms have not been disclosed Amity and Wil-Rich are to merge as a precursor to the deal. 

Parts & Accessories. The acquisition of Sparex Ltd from a UK-based business investment and management partnership will give AGCO a bigger slice of the global tractor parts and accessories business. 

Like Vapormatic, a British operation that Deere & Co acquired in 2001, Sparex is an independent, global distributor to the ag aftermarket. 

It operates in 17 countries, including a U.S. operation in Aurora, Ohio, and a Canadian business in Newcastle, Ontario. Its catalog includes more than 30,000 items for farm equipment service shops and tractor and earth-engaging replacement parts that are exported to more than 75 markets around the world. 

An ISO accredited manufacturing operation in England supplies Sparex group companies, as well as external customers, including several major OEMs.

“Sparex is an excellent fit with AGCO,” says Richenhagen. “It will extend our reach in the agricultural aftermarket and provide our customers with an even wider range of products and services.” 

He emphasizes that Sparex will continue to trade as an independent business that markets products through existing channels.

Combines. The purchase of ARGO Group’s holding in combine maker Laverda and its Fella hay equipment subsidiary in Germany gives AGCO overall control of what Richenhagen describes as one of the most modern and efficient farm machinery complexes in Europe.

AGCO’s relationship with the plant began in 2004 when a deal was struck for Laverda to supply straw walker combines in Challenger, Fendt and Massey Ferguson colors to AGCO dealers across Western, Central and Eastern Europe.

That working partnership was upgraded to a 50/50 joint venture 3 years later with AGCO’s investment helping further modernize the factory. It also paved the way for mov- ing production of AGCO’s European combine designs, including a new “hybrid” rotary separation model, into the plant.

Laverda SpA generated $127 million turnover in 2009 selling 740 combines. In 2008 when the European market was considerably more buoyant, it sold 1,040 combines with a value of nearly $170 million at current exchange rates.

Taking full control of the operation underlines AGCO’s long-term strategy to accelerate the development of its harvesting business, says Richenhagen. “It further strengthens our base of resources in Europe and we look forward to developing the Laverda brand to its full potential.”

While not explicit in AGCO’s media announcement, there is a suggestion that the acquisition will be paid for in both cash and shares because the ARGO Group says it will become an AGCO shareholder as a result of the deal.

ARGO Group president Valerio Morra, who remains on the Laverda board, adds that having successfully managed the business in partnership, he looks forward to exploring future strategic opportunities for co-operation.

In the meantime, the disposal of Laverda, which ARGO acquired from CNH Global as part of the Case- New Holland merger settlement, will allow the group to focus management and resources on its core business building Landini, McCormick and Valpadana tractors.