Acquisition will create a unique, fully integrated imagery data and geoanalytics solution in the agribusiness industry.
VANCOUVER, Aug. 14, 2018 /CNW/ - UrtheCast Corp. (TSX: UR) ("UrtheCast") and Land O'Lakes, Inc. ("Land O'Lakes") today announced they have entered a binding term sheet for the purchase of Geosys Technology Holding LLC ("Geosys"), a wholly owned subsidiary of Land O'Lakes, for a purchase price of US$20 million. This landmark deal is expected to bring unprecedented value to agribusinesses worldwide through the enhanced relationship between imagery data and geoanalytical solutions.
The closing of the transaction is subject to confirmatory due diligence, entering into definitive agreements, respective board approvals and other conditions customary for transactions of this nature. Upon the first closing, UrtheCast will take ownership of Geosys' software for accessing, processing, cataloguing and retrieving of images. Land O'Lakes, through its WinField United crop inputs and insights business, will retain ownership of all intellectual property connected to its R7® Tool and farm-gate applications.
Beth Ford, President and CEO of Land O'Lakes, said, "At Land O'Lakes, we are constantly looking for the best ways to provide long-term support to our member-owners and our customers. This transaction will enhance our proprietary R7 Tool's ability to identify the right places for farmers to make incremental in-season input investments to drive yields and profitability – in real time."
Donald Osborne, CEO of UrtheCast, commented, "This important acquisition would bring together the best-in-class imagery capabilities of UrtheCast with the proven geoanalytics power and deep agribusiness industry relationships of Geosys. By unifying these companies, UrtheCast will be well positioned as the leader in fully integrated geoanalytics solutions for the agribusiness industry. The expanded capabilities allows UrtheCast to bring unprecedented capabilities to customers across a global value chain that spans from retailers to insurance companies, banks, and commodity trading houses. By enabling us to realize an immediate expansion of our capability set, customer footprint and revenue stream, the addition of Geosys will strengthen our business while moving UrtheCast another step closer to the launch of the groundbreaking UrtheDaily constellation."
Upon the first closing, UrtheCast will continue to provide Land O'Lakes with all the services currently provided by Geosys but with an expanded utilization of data once the UrtheDaily constellation is fully operational. Services would be provided by UrtheCast pursuant to a 13-year agreement with total potential fees payable to UrtheCast over the term of the agreement in excess of US $100 million.
The first closing is expected to occur by November 6, 2018, and full completion of the transaction is expected to occur in approximately 24 months.
Geosys is the first global digital agriculture company founded by agronomists. With more than 30 years of industry experience, Geosys provides clients with data, analysis and insights needed to make more informed decisions. Services range from worldwide risk management and monitoring agricultural commodities, to input sales and precision farming support by using the latest research in agronomics, information technologies and remote sensing. Geosys also develops highly customized business solutions for large, multinational agricultural companies. Acquired by Land O'Lakes in 2013 as an independent business, Geosys is headquartered in Minneapolis, Minnesota with offices in France, Switzerland, Australia, and Brazil. For more information, visit www.geosys.com.
About Land O'Lakes, Inc.
Land O'Lakes, Inc., one of America's premier agribusiness and food companies, is a member-owned cooperative with industry-leading operations that span the spectrum from agricultural production to consumer foods. With 2017 annual sales of $14 billion, Land O'Lakes is one of the nation's largest cooperatives, ranking 216 on the Fortune 500. Building on a legacy of more than 97 years of operation, Land O'Lakes today operates some of the most respected brands in agribusiness and food production including LAND O LAKES® Dairy Foods, Purina Animal Nutrition, WinField United and Land O'Lakes SUSTAINTM. The company does business in all 50 states and more than 60 countries. Land O'Lakes, Inc. corporate headquarters are located in Arden Hills, Minnesota.
UrtheCast Corp. is a Vancouver-based company that serves the rapidly growing and evolving geospatial and geo-analytics markets with a wide range of information-rich products and services. The Company currently owns and operates two Earth Observation (EO) satellites, Deimos-1 and Deimos-2. Together with its exclusive partnerships, spanning an additional 20 satellites, UrtheCast processes and distributes imagery data and value-added products on a global scale to partners and customers in multiple markets. UrtheCast is also launching UrtheDaily™, a satellite constellation that will be the most advanced change detection system in the world, designed to capture daily, scientific grade, high-quality, medium resolution optical imagery of the Earth's entire landmass (excluding Antarctica). UrtheCast is also developing OptiSAR™, a constellation of SAR satellites which together with UrtheDaily™, will form the world's first fully-integrated optical and SAR constellation. Common shares of UrtheCast trade on the Toronto Stock Exchange as ticker "UR".
This release contains certain information which, as presented, constitutes "forward-looking information" or "forward-oriented financial information" within the meaning of applicable Canadian securities laws. Forward-looking information involves statements that relate to future events and often addresses expected future business and financial performance, containing words such as "anticipate", "plan", "explore" and "expect", statements that an action or event "may", "should" or "will" be taken or occur, or other similar expressions and includes, but is not limited to, statements relating to: UrtheCast's expected completion of the transaction on the terms set out in this press release, the definitive documentation related thereto, or at all; UrtheCast's expectations with respect to its ability to pay the aggregate purchase price; and UrtheCast's expectations with respect to the revenue to be generated by the service agreement. Such statements reflect UrtheCast's current views with respect to future events. Such statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by UrtheCast as at the date of this press release, are inherently subject to significant uncertainties and contingencies. Many factors could cause UrtheCast's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others: UrtheCast's inability to enter into definitive documentation, including the service agreement, or satisfy any of the other conditions to the completion of the transaction; UrtheCast's inability to complete the first or second closing; UrtheCast's inability to fund the purchase price; UrtheCast's inability to generate the expected revenue from the service agreement; UrtheCast's inability to raise proceeds from a subordinated debt or equity offering, achieve the required leverage and contracted revenue ratios or otherwise satisfy the first drawdown conditions or the final drawdown conditions under the credit agreement described in its May 23, 2018 press release in a timely manner or at all; as well as those factors and assumptions discussed in UrtheCast's annual information form dated April 2, 2018, which is available under UrtheCast's SEDAR profile at www.sedar.com. UrtheCast cautions readers that such factors and uncertainties are not exhaustive and that should certain risks or uncertainties materialize, or should underlying estimates or assumptions prove incorrect, actual results, performance or achievements may vary significantly from those expected. There can be no assurance that the actual strategies, results, performance, events or activities anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company.
UrtheCast undertakes no obligation to update forward-looking statements except as required by Canadian securities laws. Readers are cautioned against attributing undue certainty to forward-looking statements.
SOURCE UrtheCast Corp.
For further information: Sai Chu, Chief Financial Officer, +1 (604) 669-1788