Agco and Trimble Agriculture closed on a $2 billion joint venture to form an aftermarket tech business called PTx Trimble. The new business will retrofit existing machines and factory-install precision ag technology in the mixed-fleet market.

It’s the largest ag tech acquisition ever, according to Eric Hansotia, Agco’s chairman, president and CEO. “It allows us to serve farmers, whether they want to upgrade their own equipment or buy new equipment,” he says.

The new brand blends Trimble’s precision ag portfolio (except for certain navigation and guidance systems) with tech from JCA Industries, a Canadian brand that Agco bought in 2022. PTx builds on Precision Planting’s tech stack and its business model, according to a joint statement.

Hansotia notes the difference between the two Agco brands: PTx is a foray into autonomy, whereas Precision Planting focuses on developing smart products that improve farming practices.

“We’re bringing the three legs of the stool together,” Hansotia says — those three legs being autonomy, guidance and automated features. “I think there will be a lot of value added in the run-up to the automated machine itself.”

Coming to market

PTx will bring its products to the market in three ways, according to the joint statement:

1. Adapt current equipment. Dealers specializing in precision ag will help retrofit almost any make or vintage of equipment that farmers already own with the latest technologies.

2. Foster OEM links. PTx will expand its relationships with original equipment manufacturers to integrate PTx products at the factory.

3. Add tech to Agco brands. New machines including Fendt, Massey Ferguson and Valtra will factory-fit PTx tech.

“We’ll provide seamlessly compatible, powerfully simple precision ag solutions,” says Seth Crawford, senior vice president and general manager at PTx. “We believe technology should give farmers the flexibility to work their way across brands and throughout the crop cycle. We know farming is easier when platforms speak to each other.”

For the joint venture, Trimble received $2 billion in pre-tax cash proceeds and a 15% stake in PTx. Agco, which holds the remaining 85%, financed the transaction with $1.1 billion in recently issued senior unsecured notes, a $500 million term loan facility, other borrowings and cash on hand. PTx Trimble will be consolidated into Agco’s financial statements moving forward.

The venture is beneficial to Trimble because it streamlines the brand’s portfolio, letting developers focus on priority growth areas, according to company statements. Meanwhile, it accelerates Agco’s precision agriculture ambitions through exclusive access to Trimble Ariculture’s products. Notably, Trimble’s footprint spans other industries besides agriculture, including construction, geospatial and transportation.

“Farmers are the real winners here,” says Rob Painter, Trimble’s president and CEO. “By combining our expertise and resources through this [joint venture], we aim to accelerate the pace of innovation. With a focus on open technologies, customers will benefit from tech solutions available to farmers across a broad range of tractor and implement brands.”

Agco’s consolidated precision ag revenue is now expected to exceed $2 billion by 2028, according to the statement.