CALGARY, Jan. 18, 2012 /CNW/ - (TSX:HEM) Hemisphere GPS today announced
that it is entering the emerging data services market in precision
agriculture with a purchase agreement to acquire the assets and
operations of AgJunction from GVM, Inc. AgJunction, located in State
College, Pennsylvania, provides a cloud-based data management software
platform and wireless hardware to precision agriculture retailers and
Driven by ever-increasing global food demand versus higher costs of
inputs including fuel, fertilizer, pesticides and water, agriculture is
increasingly becoming a high-technology business. Data services now
represents an emerging growth segment in precision agriculture with
market adoption driving an 80% 3-year cumulative annual revenue growth
rate for AgJunction. Through this acquisition, Hemisphere GPS aims to
rapidly offer its customer base connected solutions integrating
location based technology hardware with cloud based wireless data
Established in 2008, AgJunction has developed a patent-pending,
flexible, web-based system for client, farm and field management. The
system is open and cloud-based to easily capture and share data from
many types of precision agriculture controllers on the farm. Effective
use of precision agriculture data can result in lower costs and
environmental impact through lower use of pesticides, fertilizer and
fuel, and provide a higher crop yield per acre, increased profitability
and lower the impact on global food costs.
Agriculture service providers including fertilizer dealers, agronomists
and co-ops can work directly with growers through the AgJunction
platform through private-branded portals integrated into their business
systems. The timely, seamless two-way transfer of data between farm
equipment and the central AgJunction repository greatly improves
efficiency and accuracy in the analysis of data related to yield, soil
sampling, fertility, and planting including the development of
prescription maps and input for other precision agriculture techniques.
The system also streamlines retailer and farm operations with features
such as equipment tracking, work order management, seed and chemical
ordering, and comprehensive reporting. The AgJunction platform is a
scalable system supporting private-branded precision agriculture
portals for major retailers such as the Wilbur-Ellis Company, Crop
Production Services (CPS) and Jimmy Sanders Inc.
"By integrating cloud-computing and location based applications,
AgJunction's technology removes complexities, costs and limitations
currently associated with sharing and processing precision agriculture
data," said Steven Koles, President and CEO of Hemisphere GPS. "This
acquisition represents tremendous strategic value by rapidly moving
Hemisphere GPS towards a leadership position in this emerging precision
agriculture data services sector. We will now have the capability of
bringing real-time decision-making information right into the farmers
cab. It also brings strategic customer relationships with agriculture
retailers and offers a range of integration opportunities for our
portfolio of precision agriculture solutions. For Hemisphere GPS
shareholders, it creates a cloud-based computing division that provides
profitable, recurring, software as a service (SaaS) license revenues."
Details of the Acquisition
Pursuant to the acquisition, Hemisphere GPS will purchase the AgJunction
assets and operations for consideration at closing of US$2.0 million in
cash and 5,447,410 common shares of Hemisphere GPS. As additional
purchase consideration, Hemisphere GPS will pay cash earn-out payments
to a maximum of US$0.5M and 2,723,705 common shares upon the
achievement of revenue growth targets for each of the 2012 and 2013
fiscal years. The transaction is projected to add approximately $4.5M
incrementally to Hemisphere GPS' 2012 revenues, approximately $2.5M to
cashflow from operations, and be accretive to the net earnings of
Hemisphere GPS for 2012 and future years. The deal is anticipated to
close before February, 2012, subject to certain closing conditions,
including the approval of the Toronto Stock Exchange.
AgJunction's branding and availability will remain intact as Hemisphere
GPS' cloud computing division. As part of the acquisition, Mark
Anderson, President and owner of GVM, will join the Hemisphere GPS
Board of Directors and GVM's dealer locations will become part of
Hemisphere GPS' Outback Guidance dealer network.
"Hemisphere GPS and their precision farming solutions make them a
perfect complement to our AgJunction division," said Mark Anderson.
"Combining the companies will contribute to strong growth in AgJunction
data management services and facilitate newly integrated solutions that
will enhance the value of precision agriculture solutions. Growers and
their service providers are realizing that the greatest value from
precision agriculture techniques can only be unlocked through the
proper management of the location based agricultural data."
AgJunction has 10 employees and patent-pending technology that
collectively manages over 16 million acres at 22,000 farms in the
United States and Canada. For more information about AgJunction visit www.agjunction.com.
About GVM Inc.
GVM, Inc. is a private company headquartered in Biglerville,
Pennsylvania. The company was founded in 1977 and designs and
manufactures self-propelled fertilizer spreaders and sprayers and
related equipment including the Predator and Prowler product lines.
GVM's history includes many firsts - including being the first company
to develop an agricultural machine with an easy-on, easy-off
liquid-to-dry change-over in less than one hour. For more information
on GVM visit www.gvminc.com.
About Hemisphere GPS
Hemisphere GPS designs and manufactures innovative, cost-effective GPS
(GNSS) products for positioning, guidance, and machine control
applications in agriculture, marine, construction, and other markets. The Company holds numerous patents and other
intellectual property and owns several leading brand names, including Outback Guidance®, a leading brand in precision GPS for agriculture. The Company is
headquartered in Calgary, Alberta, with major product development,
sales, and marketing facilities in Arizona, Kansas, and Australia.
Hemisphere GPS is listed on the Toronto Stock Exchange (TSX) trading
under the symbol "HEM" and is one of the TSX Cleantech designated companies. For more
information about Hemisphere GPS, please go to www.hemispheregps.com.
The above disclosure contains certain forward-looking statements that
involve substantial known and unknown risks and uncertainties. These
forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond Hemisphere GPS' control,
including: the impact of general economic conditions, industry
conditions, increased competition, the lack of availability of
qualified personnel or management, fluctuations in foreign exchange or
interest rates, stock market volatility and market valuations of
companies with respect to the announced transactions and the final
valuations thereof, and obtaining required approvals of regulatory
authorities. Hemisphere GPS' actual results, performance or achievement
could differ materially from those expressed in, or implied by these
forward-looking statements and, accordingly, no assurances can be given
that any of the events anticipated by the forward-looking statements
will transpire or occur, or if any of them do so, what benefits,
including the amount of proceed, that Hemisphere GPS will derive there
SOURCE Hemisphere GPS Inc.
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