Agtech CropLogic buys Tassie beachhead; shares jump 19pc
Food & Agriculture
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Kiwi agtech play CropLogic has made its first move into Australia with the strategic acquisition of a small Tasmania-based agronomy service, Ag Logic.
The move is an expansion of CropLogic’s focus on global potato crops and follows the acqusition of a similar potato-focused US agronomy company, Washington-based ProAg.
Tasmania produces about a quarter of Australia’s potato crop.
CropLogic (ASX:CLI) shares were trading up 19 per cent at 5.1c just before midday AEST — still a long way from the stock’s 20c issue price in September.
CropLogic’s analytical platform gathers crop data from in-field sensors coupled with satellite communications to predict outcomes and optimise field productivity. Initial studies have been focused on potato crops.
In Australia, more than 75 per cent of all national potato production is represented by Tasmania, Victoria and South Australia.
“We believe we have again found a similar partner in Ag Logic and we look forward to servicing the growers of Tasmania together,” managing director Jamie Cairns said.
“We are confident that this partnership will also lead to wider geographical and commercial relationships and are looking towards national and multinational agricultural companies and processors operating through Australia.”
The acquisition values Ag Logic at its current revenue of roughly $320,000 – which will be paid half-and-half in cash and scrip.
As part of the deal, former head Dr Reuben Wells will also join the payroll at a base salary of $100,000.
And across the Atlantic, the company was branching out from potatoes into US corn, carrots and onions ahead of the growing season.
“While CropLogic has led with potatoes, onions remain a target crop for us and it is pleasing that we are getting traction in this commodity for our technical offering,” Mr Cairns said.
“One of the benefits for CropLogic in acquisitions such as that in the USA is that we pick up existing revenue streams from these crops of interest and can then tailor our technical offering to that crop whilst still generating revenue in the traditional manner.”
The technology was built on 30 years of scientific research by The New Zealand Institute of Plant and Food Research, and follows an increased focus on agTech as Australia looks to double its output to a market of $100 billion by 2030.