Donnelle Eller

deller@dmreg.com

Deere & Co. said Tuesday it's buying a majority stake in Hagie Manufacturing, the Clarion-based maker of high-clearance precision sprayers.

No purchase price was disclosed.

Moline, Ill.-based Deere said the sprayers would continue to be built in the north central Iowa, where the company was founded in 1947 by Ray Hagie.

"Clearly, Deere has a very good tractor and combine portfolio," said Kwame Webb, a Morningstar analyst, but the farm and construction equipment manufacturer needed to strengthen its sprayer lineup.

Deere said the Hagie purchase gives the company a new market. And it enables enables Deere to integrate its precision technology into Hagie's equipment.

High-clearance sprayers give farmers more flexibility in providing nutrients to crops late in the season.

The investment also makes Deere more competitive with CNH Industrial, the maker of Case IH farm equipment, which purchased a Wisconsin-based high-clearance sprayer manufacturer in 2014, Webb said.

"The argument from that seller was that when you're doing $100 million in sales, you don't have dedicated distribution" to sell equipment, Webb said. "It's tough in the best of times."

Deere said the sprayers would continue to carry the Hagie brand as products are integrated into its "global distribution channel over the next 15 months."

Webb said he believed the sprayers would likely become Deere products over time.

Consolidation is ramping up in the agricultural industry, with several recent combinations, including the merger of giants Dow and DuPont, the parent of Johnston-based seed company Pioneer.

"This is a rough patch for the industry," Webb said. "Deere's share prices has been more resilient but that's not what you're seeing in the private markets.

"I do not know the purchase price, but I can tell you it's not what it would have commanded three or four years ago," he said.

Alan Hagie, CEO of Hagie, said in a statement the company needs "a business model that helps us reach more customers."

"This partnership with Deere allows our solutions to reach customers on a global scale and ensure they are supported with the world-class Deere dealer organization,” Hagie said.