(Reuters) - Canadian auto parts maker Linamar Corp said on Thursday it agreed to buy privately held MacDon Group of Cos for C$1.2 billion ($937 million), to strengthen its presence in the agricultural equipment market.
Winnipeg, Manitoba-headquartered MacDon designs and manufactures specialized agriculture harvesting equipment such as drapers and self-propelled windrowers.
The deal helps diversify further into agriculture, which looks poised for long-term growth as the global population expands, Linamar CEO Linda Hasenfratz said.
“The agriculture market is in early stages of cyclical recovery, so it’s a great time to step in,” she said on a conference call.
MacDon will be combined with Linamar’s existing agriculture harvesting business in Hungary, the company said.
Linamar said its existing revolving credit facility would be increased as part of the deal.
The deal, which is expected to close in the first quarter of 2018, is expected to immediately add to earnings, Linamar said.
BMO Capital Markets and TD Securities are financial advisers to Linamar, while Blake, Cassels & Graydon are providing legal counsel.
($1 = 1.28 Canadian dollars)
Reporting by Roopal Verma in Bengaluru; Editing by Sriraj Kalluvila