AgJunction News
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Creates global leader in automated steering and machine control
HIAWATHA, KS and FREMONT, CA, March 16, 2015 /CNW/ - (TSX: AJX) — AgJunction Inc. ("AgJunction") (TSX:AJX) and Novariant Inc. ("Novariant") have entered into an agreement (the "Agreement") under which AgJunction has agreed to acquire Novariant through a merger transaction pursuant to which AgJunction will issue common shares to Novariant shareholders.
Combined, the two companies establish a preeminent position in automated steering and machine control technologies worldwide, combining product portfolios and leveraging industry-leading intellectual property.
Specifically, Novariant and AgJunction will be better positioned to achieve market objectives through leveraging:
A larger presence with more resources
A broader OEM partner list
One of the precision agriculture industry's most comprehensive intellectual property portfolios, providing increased IP protection for OEM partners
I
ncreased R&D capability and efficiency
Complementary customers, market geographies and distribution channels
Reductions in operating redundancy to further improve profitability
Novariant is a premier provider of advanced steering solutions for precision agriculture. Based in Silicon Valley, Novariant's steering solutions are used today in over 60 countries. With approximately 55 employees worldwide, Novariant generated revenues of approximately $30 million in 2014.
Completion of the transaction is expected during the summer of 2015 and is subject to a number of conditions, including receipt of a permit from the California Commissioner of Corporations following a hearing held to consider the terms of the transaction, approval of the shareholders of Novariant, approval of the shareholders of AgJunction at a Special Shareholders Meeting to be held in the summer of 2015 (the "Meeting") and receipt of customary regulatory approvals, including the approval of the Toronto Stock Exchange.
Under the terms of the Agreement, which has been unanimously approved by the boards of directors of both companies, AgJunction shares will be issued to shareholders of Novariant in exchange for all of the shares of Novariant. After giving effect to the issuance of such AgJunction shares, AgJunction will have approximately 123.7 million fully diluted shares outstanding, of which approximately 49.5 million shares will be held by the former shareholders of Novariant, representing approximately 40% of the combined company.
Upon conclusion of the transaction, it is anticipated that directors, officers, and other insiders will hold approximately 30.6% of the combined company. This includes Novariant's largest shareholder, Investor Growth Capital ("IGC"), an independent venture capital firm specializing in expansion-stage investments. IGC will become the largest shareholder of the combined company at approximately 15% ownership.