Source: Chicago Business Journal
September 3, 2013 — Deere & Co. said it will review strategic options for its John Deere Water irrigation operations and has hired Bank of America Merrill Lynch as exclusive financial advisor to assist in the initiative.
Moline-based Deere said it has made no formal decisions on its irrigation operations and hasn’t reached any agreements related to the business.
Noting that “effective water management remains an important part of agriculture worldwide,” the farm equipment maker said it will continue to develop and offer products and services to help customers better manage agronomic activities in the field.
Deere said it remains committed to further enhancing products such as its in-field moisture sensing and climate monitoring system known as John Deere Field Connect, which is part of the company's John Deere FarmSight marketing strategy.
Deere has been involved in the production of irrigation products for the past seven years. John Deere Water is currently one of the world's largest full-line drip irrigation manufacturers with global operations and significant distribution in North and South America, Asia, Europe and Africa.
John Deere Water employs about 1,300 workers, or about 1.9 percent of Deere’s workforce based on total employees at the end of fiscal 2012, according to Bloomberg. Last month, Deere took a $44 million impairment charge related to assets in the division.Some analysts estimate annual sales at the division to be less than $250 million, or below 1 percent of total revenue, Bloomberg said.
The global sprinkler irrigation system market is estimated to reach $2.4 billion by 2016, reports Bloomberg. Leading operators in the sector include Israel’s Netafim Inc., Jain Irrigation Systems Ltd. of India and Toro Co. in the U.S.