Monsanto (MON) Arm Buys Farm Management Firm VitalFields
Zacks Investment Research | Nov 22, 2016 09:26PM ET
Monsanto Company’s (NYSE:MON) business subsidiary, The Climate Corporation, recently acquired VitalFields for an undisclosed amount. VitalFields is a Tallinn, Estonia based European farm management company. The company offers user friendly tools to farmers, for managing, planning and evaluating variable field activities.
Monsanto believes that this transaction would boost Climate Corporation’s competency. The acquisition is also in sync with the company’s goal to deliver a centrally connected digitalized agricultural platform to farmers around the world. VitalFields’ tools would be marketed in Europe under Monsanto’s tag.
Benefit for Monsanto
Prior to the above mentioned buyout, Monsanto’s venture capital arm – Monsanto Growth Ventures (‘MGV’) – had made certain investments in VitalFields, in order to include it within the MGV portfolio.
Monsanto believes that including VitalFields tools would complement Climate Corporations’ Climate FieldView platform’s offerings in the near term. VitalFields’ digital agricultural tools would make the operations of European farmers more sustainable and efficient. Moreover, the VitalFields buyout is Climate Corporation’s first step in the European market.
In Sep 2016, Monsanto accepted Bayer (DE:BAYGN) AG’s (OTC:BAYRY) all-cash $66-billion buyout offer. However, the deal has yet not passed through any regulatory hurdles.
Zacks Rank and Share Price
Monsanto currently carries a Zacks Rank #5 (Strong Sell).
Extensive industry rivalry, unfavorable commodity prices, a stronger U.S. dollar and dismal climatic conditions in certain niche markets are all hurting Monsanto’s revenues and margins.
Share price of the company was $101.75 per share as of Nov 22, 2016.
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