Trimble (NASDAQ: TRMB) announced that it has acquired privately-held IRON Solutions, Inc. of Franklin, Tenn. IRON Solutions provides market information, analytics-based intelligence and a cloud-based enterprise system to improve dealer and producer productivity.
Coupled with Trimble’s Connected Farm™ solution, IRON Solutions will enable improved real-time decisions for equipment fleets and more tightly link equipment, seed and chemical dealers to the grower through its ERP/CRM systems. Farmers, their equipment dealers and their agronomy advisors will now have one Connected Farm platform for collaboration on key investment and prescription decisions. IRON Solutions manages over 15 million data points annually from over 1,200 manufacturers and over 2,200 retail sources throughout North America. Financial terms were not disclosed.
About Trimble’s Agriculture Division
Trimble Agriculture solutions enable customers to maximize efficiency and reduce chemical and fertilizer inputs while also protecting natural resources and the environment. Trimble’s precision agriculture solutions cover all seasons, crops, terrains, and farm sizes, and its brand-agnostic strategy allows farmers to use Trimble products on most vehicles in their fleet—regardless of manufacturer. To enable better decision making, Trimble offers the Connected Farm solution which allows farmers to collect, share, and manage information across their farm in real time. To optimize water use, Trimble provides water solutions for irrigation, drainage, and land leveling. Trimble’s product suite includes vehicle and implement guidance and steering, as well as a portfolio of correction options that are the most versatile of their kind in the industry. Additional solutions include an unmanned aircraft system (UAS) for aerial imaging and mapping; application control for seed, liquid, and granular products; a harvest solution; and farm management software.
Trimble applies technology to make field and mobile workers in businesses and government significantly more productive. Solutions are focused on applications requiring position or location—including surveying, construction, agriculture, fleet and asset management, public safety and mapping. In addition to utilizing positioning technologies, such as GPS, lasers and optics, Trimble solutions may include software content specific to the needs of the user. Wireless technologies are utilized to deliver the solution to the user and to ensure a tight coupling of the field and the back office. Founded in 1978, Trimble is headquartered in Sunnyvale, Calif.
Outsell’s Chuck Richards VP & Lead Analyst commented in his recent Outsell Insight:
“IRON Solutions’ CEO captured the unique opportunity from info-buys when he noted that “information has a starting point and does not have an end point. It lives forever; it never dies.” The information supply chain, then, parallels the product (food) supply chain. In agriculture, it begins with the weather and the soil, continues to the plants, moves on to the harvest and then to the transport to market on machines. Information at each stage is necessary to virtualize the production, to analyze it, and to improve it. IRON Solutions’ deep presence in the information and analytics for all of the equipment used for planting, husbanding, and harvesting aligns tightly with Trimble’s Connected Farm Services, GPS and satellite tools, and data sensors. IRON Solutions and Trimble are well-matched components of the analytics capable of increasing productivity, yields, the global food supply, and the well-being of the farmers who produce all of it. Each of these links adds value.
This information and analytics supply chain will play out in other sectors beyond agriculture. And, as the number of data-embedded workflow solutions grows from B2B trade and business information services, increasingly the buyer pool will expand beyond the traditional prospect lists of financial buyers and strategic buyers, where the latter used to mean information and media companies.
Neutrality and independence are important with info-buys. The supplier risks losing customers if, for example, it will not allow the acquired company to sell to competitive suppliers. Similarly, if the acquired company demonstrates bias favoring its owner, denigrating its competitors, or if it ceases ratings and rankings of suppliers that it previously published, it will lose customers. In fact, to reinforce neutrality, both IRON Solutions and Climate Corp are structured as free-standing, wholly owned subsidiaries. They were equity, not asset purchases, and are not integrated and merged into the acquirers’ existing business units.
This is a major shift in developing investment and exit strategies and, for investment bankers, a shift in whom to contact as prospects for these valuable workflow information and platform companies. For those B2B trade and business information companies wishing to buy into these businesses – and that has been the dominant manner with organic formation being very rare indeed – the growth of info-buys will increase the price of these workflow services over the next five years. The early evidence of this includes the estimated multiples of 5.1x revenue for IRON Solutions and 18.6x for Climate Corp. But we are certainly not forecasting routine 10+ revenue multipliers for future info-buys. Climate Corp was an outlier based on very high growth prospects and the “Google glow” factor from the founders’ roles there.
Joachim C Bartels is a co-founder, managing director and Editor-in-Chief of BIIA. In his capacity as Editor-in-Chief he is responsible for the selection of relevant information content concerning industry insights, trends, technological developments, standards and policies impacting BIIA members in particular and the business information industry in general.
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