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DuPont buys agriculture technology company

The agriculture business that will be spun off from the merger of the Dow Chemical Co. and DuPont may be almost two years away, but DuPont is already strengthening it.

To achieve that goal, DuPont agreed to purchase Granular Inc., a San Francisco-based provider of agriculture software and analytics tools. Granular said its technology helps farmers improve efficiency, profitability and sustainability.

Launched in 2014, Granular serves farmers in the United States, Canada and Australia who grow more than 2 million acres of commodity and specialty crops. It also operates AcreValue.com, a digital marketplace for farmland real estate, which was included in the deal.

A sales price was not disclosed. DuPont expects the deal to close in the third quarter.

DuPont said in a statement the Granular acquisition is part of its plan to create a digital agriculture ecosystem to support information sharing, services and commerce among farmers. The Wilmington-area-based company said Granular will help it connect growers with public and private data to develop a “digitally, connected, more sustainable agriculture industry.”

“This acquisition is an important component of our commitment to leading and shaping the agtech market,” James C. Collins, a DuPont executive vice president with responsibility for the company’s agriculture unit, said in a statement. “We believe DuPont’s agronomy expertise, deep customer relationships and market reach will accelerate Granular’s business growth and help us deliver more value to growers around the world.”

Trey Hill, CEO of Harborview Farms in Rock Hall, Maryland, said he relies on products from Granular and DuPont for his farm.

“Granular’s products have become indispensable tools for me as the leader of a farm business,” Hill said. “I am excited to see how this combination of leading products, teams and technologies will shape the future of digital agriculture.”

Ultimately, it will be the $16 billion, Delaware-based agriculture spinoff that will benefit from the Granular purchase. The spinoff will be one of three created through the nearly $150 billion Dow-DuPont merger.

“Granular will strengthen the spinoff’s competitive position,” said Matt Arnold, an analyst with Edward Jones in St. Louis. “When it comes to agriculture technology, it is increasingly becoming a strategic imperative to have a broad offering to help farmers manage every element of their business.”

Some of the large agriculture industry players have snapped up startup businesses in recent years. In 2013, Monsanto paid $930 million for the Climate Corp., a business that underwrites weather insurance for farmers.

The acquisitions give agriculture companies more offerings and services to the farmers who are buying their seeds.

“All of the crop companies are investing in this market and we don’t view these investments as much as profit drivers as more of a strong service offering that helps sell the seed and chemical operations.”

The ability to offer different products and services could enable agriculture businesses to create a distinct identity for themselves in an increasingly shrinking market. Last year, five of the world’s six largest agriculture companies agreed to separate mergers.

Bayer has struck a deal to acquire Monsanto, and ChemChina, a Chinese company, is buying Syngenta. If all three mergers are approved, three businesses would control 62 percent of the world’s patented seeds and 24 percent of all pesticides.

DuPont’s agriculture business is slated to launch between 18 and 24 months after the merger is completed later this month. It will be one of three publicly-traded, independent companies created through the consolidation.

A $12 billion specialty products spinoff that will be based in Delaware will also be created in the transaction along with a material sciences company. The material sciences company will be headquartered in Midland, Michigan, the hometown of Dow.

The success of the agriculture company in Delaware is critical to helping to reduce the state’s jobless numbers, which outpace the nation. Delaware officials need the state-based spinoffs to grow and bring back some of the 1,700 high-paying research and science jobs DuPont cut last year.

“The only thing Delaware can do is get on to the [spin off] phase and hope it goes as well as it can for the state,” Jim Butkiewicz, chairman of the University of Delaware’s Economics Department told The News Journal earlier this month.

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