Deere & Co. has signed a definitive agreement to acquire the Wirtgen Group, a privately held international company that is the leading manufacturer worldwide of road construction equipment.
The total transaction value is approximately $5.2 billion, including the assumption of net debt and other consideration. Deere expects the transaction to be accretive to earnings per share and currently expects to fund the acquisition from a combination of cash and new equipment operations debt financing. Detailed financial information concerning the transaction is included in an investor presentation available at www.JohnDeere.com/events-and-presentations.
Headquartered in Germany, the Wirtgen Group has five brands across the entire road construction sector spanning milling, processing, mixing, paving, compaction and rehabilitation. Wirtgen’s complementary product portfolio enhances Deere’s existing construction equipment offering and establishes Deere as an industry leader in global road construction. The Wirtgen Group has a global footprint with approximately 8,000 employees and sells products in more than 100 countries through a large network of company-owned and independent dealers.
“The acquisition of the Wirtgen Group aligns with our long-term strategy to expand in both of John Deere’s global growth businesses of agriculture and construction,” said Samuel Allen, Deere & Co. Chairman and Chief Executive Officer. “Wirtgen’s superb reputation, strong customer relationships and demonstrated financial performance are attractive as we expand the reach of John Deere construction equipment to more customers, markets and geographies.”
Stefan Wirtgen, Managing Director at Wirtgen, said, “The Wirtgen Group has a legacy of technology and innovation with market-leading products and a strong focus on the customer. As we looked to the future, we specifically chose Deere as the buyer because of our long-held respect for the organization and our full confidence that Deere is dedicated to the ongoing success of the Wirtgen Group and our employees worldwide.”
Jürgen Wirtgen, Managing Director at Wirtgen, added, “Our company’s strength and success comes from dedicated employees who are focused on helping customers succeed in the road construction industry. We believe this transaction allows the company to be successful well into the future—independent of our family ownership.”
Deere plans to maintain the Wirtgen Group’s existing brands, management, manufacturing footprint, employees and distribution network. The combined business is expected to benefit from sharing best practices in distribution, customer support, manufacturing and technology as well as in scale and efficiency of operations.
