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AGCO Corp. (AGCO) to Acquire Lely Group's Forage Division

Zacks Equity Research

The manufacturer and distributor of agricultural equipment, AGCO Corporation AGCO has entered into an agreement to acquire the forage division of Lely Group. The transaction is subject to regulatory approvals.

Lely’s forage division is a leading manufacturer of balers and loader wagons in Europe. The integration of Lely’s industry leading competence in hay and forage technology will further reinforce AGCO’s product offering.

The buyout is expected to close in fourth-quarter 2017. In addition, the process for employee consultation will be started soon.

AGCO Corporation Price


AGCO Corporation Price | AGCO Corporation Quote

In Sep 2016, AGCO acquired Cimbria Holdings Limited – a leading manufacturer of products and solutions for processing, handling, and storage of seed and grain – for around $337.5 million. Also, in Feb 2016, the company acquired Tecno Poultry Equipment S.p.A for approximately $63.8 million.

Acquisitions positively impacted AGCO’s net sales during 2016 as compared to 2015, by roughly $173.2 million, or 2.3%. The company intends to increase the investment level to execute its product development plans. This, in turn, will result in increased capital expenditure and engineering spend in 2017.

AGCO underperformed the Zacks categorized Machinery Farm industry over the past one year. The company’s shares gained around 16.9% during this period, compared with the industry’s gain of around 33%.


AGCO currently carries a Zacks Rank #3 (Hold).

Key Picks

Better-ranked stocks in the same space include Brady Corporation BRC, Casella Waste Systems, Inc. CWST and Deere & Company DE. All the three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Brady Corporation has a positive average earnings surprise of 20.84% for the last four quarters. Casella Waste generated a remarkable positive average earnings surprise of 165.21% over the trailing four quarters. Deere & Company has delivered an average positive earnings surprise of 60.50% in the past four quarters.

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