Valmont Snaps Up Prospera For $300M

Agricultural products and services provider Valmont Industries (VMI) has agreed to acquire Prospera technologies for about $300 million. Valmont expects the transaction to close in Q2.  

Israel-based Prospera is a private agricultural artificial intelligence company. It develops machine vision technologies that monitor the development, health, and stress level of plants so that farmers can grow crops more efficiently.

The two companies have partnered since 2019, providing real-time analysis of crops and solutions to detect anomalies. They proved their ability to work together by monitoring 5 million acres in 2020 instead of the originally planned 1 million.

Valmont President and CEO Stephen G. Kaniewski said, “Building on the successful partnership with Prospera, we are accelerating our commitment to provide services that enhance the lives of our customers and the communities in which they operate, as well as finding new ways to achieve higher crop yields using less- land, water, chemicals, fertilizers, fuel and time.” (See Valmont stock analysis on TipRanks)

Notably, this acquisition creates the largest agricultural AI company in the world that has vertical integration.

On April 23, D. A. Davidson analyst Brent Thielman reiterated a Hold rating on the stock and raised the price target to $215 (15.1% potential downside) from $200.

Thielman thinks Valmont’s recent Q1 earnings “solidly” exceeded forecasts and the company saw momentum in utility, irrigation, and wireless structures.

Consensus on the Street is that Valmont is a Moderate Buy based on 1 Buy and 2 Holds. The average analyst price target of $232.50 implies 8.2% potential downside. That’s after the stock has seen a gain of around 124% over the past year.

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