Raven (RAVN) pops 49% in pre-market on CNH’s $2.1B deal

June 21, 2021 07:32 AM PDT | By Kiran Murali

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Raven (RAVN) pops 49% in pre-market on CNH’s $2.1B deal — Image source: MISTER DIN, Shutterstock.com

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Summary

CNH Industrial will pay US$58 per share to fully acquire Raven.

The offer price represents a premium of 33.6 percent to Raven’s 4-week volume-weighted average share price.

The acquisition could be completed in the fourth quarter this year.

Raven Industries Inc. (NASDAQ:RAVN) stock rallied over 49 percent on Monday’s pre-market trading after the precision agriculture products maker said CNH Industrial N.V. (NYSE:CNHI) is set to buy the company for an enterprise value of US$2.1 billion.

CNH Industrial is a Dutch-based agriculture and construction equipment, and commercial vehicle maker. It will pay US$58 per share in cash for 100 percent acquisition of Raven

The offer price represents a premium of 33.6 percent to Raven’s four weeks volume-weighted average share price and 50 percent to its Friday’s closing price. CNH Industrial will fund the deal with cash on hand.

CNH Industrial expects the acquisition to strengthen its precision farming portfolio and its position in the agriculture equipment market.

The merger will create US$400 million in run-rate revenue synergies and US$150 million in incremental EBITDA by 2025.

The acquisition could be completed in the fourth quarter this year. The deal is conditional upon Raven shareholders and regulators approvals.

Barclays and Goldman Sachs are the financial advisors and Sullivan & Cromwell LLP was the legal advisor to CNH Industrial. J.P. Morgan Securities LLC was the financial advisor to Raven while Davis Polk & Wardwell LLP was the legal advisor.

CNH Industrial stock rose approximately 1.05 percent in the pre-market trading on June 21.

Source: Pixabay

What does Raven Industries do?

South Dakota-based Raven operates through three divisions. Its Applied Technology unit offers precision agriculture solutions and autonomous agricultural solutions. Engineered Films division makes and installs high-quality polymer films and sheeting, while the Aerostar unit makes stratospheric balloons, radar systems and persistent communication platforms.

In the fiscal year 2021 ended January 31, Raven recorded consolidated net sales of US$348.4 million and net income of US$18.8 million. Net sales in the applied technology unit and engineered films units totaled US$147.2 million and US$147.9 million respectively.

RAVN & CNH stock performances

South Dakota-based Raven is currently listed on NASDAQ and has a market value of US$1.38 billion. Raven’s stock is up 16 percent year to date while it soared 84 percent in the one-year period.

CNH Industrial’s stock trades in New York and Milan. On NYSE, CNH Industrial has a value of US$21.93 billion. Its stock gained 30 percent this year and 142 percent in one year.

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