Nordson Corporation, a global precision technology company, has announced its plan to acquire ARAG Group and its subsidiaries in an all-cash transaction. The acquisition is valued at €960 million and expects to enhance Nordson’s presence in the precision agriculture market. The deal aligns with Nordson’s strategic focus on companies with differentiated technologies and a customer-centric approach.
ARAG, headquartered in Rubiera, Italy, is a market and innovation leader in the development, production, and supply of precision control systems and smart-fluid components for agricultural spraying. Its product portfolio includes fluid components such as nozzles, pumps, and filters, as well as smart components that measure and control the flow of dispensed fluid. Additionally, ARAG offers control systems that provide enhanced functionality to customers. With seven manufacturing and distribution locations worldwide and a sales network serving over 80 countries, ARAG has established itself as a well-known firm in Europe and South America.
Nordson’s decision to acquire ARAG is part of its Ascend Strategy, which aims to expand the company’s presence in high-growth markets. Precision agriculture, in particular, presents significant opportunities for growth. ARAG’s precision spraying, dispensing, and software solutions help farmers increase crop yields while reducing the usage of fertilizers and chemicals. By leveraging Nordson’s strong brand and commercial infrastructure, the company plans to expand ARAG’s limited presence in the North American market.
The acquisition of ARAG reflects Nordson’s disciplined capital deployment strategy, focused on acquiring high-quality niche leaders in attractive growth markets. ARAG’s leading innovation capabilities and favorable growth trends in precision agriculture contribute to its strong financial profile. The company is projected to generate €155 million in sales in the 2023 fiscal year with transaction values ARAG at approximately 16.5 times its projected 2023 EBITDA. Upon completion of the acquisition, ARAG will operate as a division within Nordson’s Industrial Precision Solutions segment.
Nordson’s president and CEO, Sundaram Nagarajan, expressed enthusiasm for the acquisition, noting that precision dispensing is a core capability of Nordson, and the addition of ARAG’s precision technology portfolio will enable the company to enter the high-growth precision agriculture market. Nordson’s executive vice president, Jeffrey Pembroke, highlighted the company’s ability to leverage its brand and commercial infrastructure to expand ARAG’s presence in North America.
The transaction is expected to close in Nordson’s fourth quarter of the 2023 fiscal year and will be funded through a combination of cash on hand and financial debt. Deutsche Bank acted as the exclusive financial advisor, and Jones Day provided legal advisory services to Nordson Corporation.
ARAG is currently privately held by funds advised by Capvis AG, a European mid-market private equity firm. Capvis acquired ARAG in 2020 from its founders. Both the founders and the management team have remained invested during Capvis’ holding period. Andreas Simon, Capvis partner and head of Industrial Technology, expressed delight at the partnership and stated that ARAG, with its significant electronic and software drivers, is well-positioned to continue its growth trajectory with Nordson.
Nordson Corporation, founded in 1954 and headquartered in Westlake, Ohio, operates through a division-led organization and focuses on delivering top-tier growth with leading margins and returns. The company serves global customers across diverse end markets, including consumer non-durable, medical, electronics, and industrial sectors. Nordson has operations and support offices in over 35 countries.
As Nordson moves forward with the acquisition of ARAG, it reaffirms its commitment to strategic growth, innovation, and creating long-term shareholder value. With the combination of Nordson’s global presence and ARAG’s precision agriculture solutions, the company is positioned to make a significant impact in the growing market of sustainable agricultural practices.
Image provided by Capvis AG
1 Comment