UrtheCast Corp. and Land O’Lakes, Inc. have entered a binding term sheet for the purchase of Geosys Technology Holding LLC, a wholly owned subsidiary of Land O’Lakes, for a purchase price of US$20 million.
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.
“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,” said Beth Ford, President and CEO, Land O’Lakes.
“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,” said Donald Osborne, CEO of UrtheCast. “By unifying these companies, UrtheCast will be well positioned as the leader in fully integrated geoanalytics solutions for the agribusiness industry.”
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 Nov. 6, 2018, and full completion of the transaction is expected to occur in approximately 24 months.