As a recent round of acquisitions illustrates, recovery in farm machinery markets has not come soon enough for some manufacturers — although their financial difficulties have presented useful expansion opportunities for businesses with healthier balance sheets.
In Italy, hay tools manufacturer Sitrex SpA has acquired a range of trailed and self-propelled mixer-feeders with the purchase from administrators of all intellectual property rights to these machines and, separately, the company Unifast Brand & Engineering, which holds the AGM logo that the machines carry.
Sitrex founder and president, Giovanni Signorelli, says the feeder products, which are already distributed in North America, will complement the mowers, tedders, windrow turners and rakes that Sitrex USA Inc. distributes through locations in Houston, Texas, and Omaha, Neb.
The U.S. operation accounts for a large proportion of company exports — currently more than 90% of production — from the three plants in Italy where the hay tools are manufactured and assembled. Acquiring Unifast AGM adds another plant and 30 employees to the company's head-count of 90.
Rabe Agri of Germany, a manufacturer of moldboard plows, cultivators and seeders, is said to have attracted a number of potential buyers when it applied for insolvency proceedings earlier this year. Grégoire Besson of France has acquired the business, creating a group with a combined turnover equivalent to $120 million.
Despite the two company's product lines having many of similarities, Grégoire Besson's president, Patrick Besson, says there is strategic value in the deal.
"We will gain production capacity, a powerful sales network particularly well established in Germany and a broader product line that includes mechanical and air seed drills," he points out. "For Rabe, we can offer new markets accessible through the Grégoire Besson distribution network."
The French company operates six production facilities in France and Italy, and is double the size of its newly acquired business with turnover equivalent to $80 million in 2010 and 380 employees. It has subsidiary sales companies in Britain, Poland, Russia and Canada, but is not active in the U.S.
Although the acquisition brings some benefits, it also presents some challenges, not least resolving Rabe's precarious financial position. The company previously entered administration (bankruptcy) in 2006 and its then new owners were confident of putting the business on a sound footing.