Nordson Corporation Set to Boost Crop Yields with ARAG Acquisition: A Market and Technology Leader in Precision Spraying Solutions

Nordson Corporation has announced the acquisition of ARAG Group and its subsidiaries in an all-cash deal valued at €960 million. The acquisition will see Nordson enter the high-growth market of precision agriculture, with ARAG being an innovation and market leader in the development, production, and supply of precision control systems and smart fluid components for agricultural spraying. ARAG’s solutions help customers boost crop yields while sustainably reducing the usage of fertilizers and chemicals. The acquisition aligns well with Nordson’s disciplined capital deployment strategy focused on high-quality niche leaders serving attractive growth markets that are additive to Nordson’s existing lines of business and support long-term shareholder value creation.

With nearly 70 years of expertise in precision dispensing, Nordson is expanding beyond its beginnings in industrial applications into packaging, product assembly, nonwovens, electronics, medical, and more. This acquisition expands Nordson’s core dispense capabilities into the attractive market of precision agriculture. Sundaram Nagarajan, President, and CEO of Nordson Corporation said, “Nordson is attracted to companies with differentiated technologies and a customer-centric model. ARAG’s innovative precision spraying, dispense, and software solutions bring those capabilities to our portfolio.”

ARAG has a broad portfolio consisting of three key product families: fluid components such as nozzles, pumps, and filters; smart components that measure and control the flow, quantity, and location of the dispensed fluid; and control systems that provide a greater variety of input and functionality to the customer. Its broad product portfolio is further supported by differentiated software and data capabilities. ARAG supports its customers through seven manufacturing and distribution locations globally and a sales network serving more than 80 countries.

Jeffrey Pembroke, Executive Vice President of Nordson Industrial Precision Solutions segment noted that “ARAG’s differentiated precision technology portfolio generates Nordson-like gross margins. Well established and known in Europe and South America, we will be able to leverage Nordson’s strong brand and commercial infrastructure to expand ARAG’s limited presence in the North American market.”

ARAG has a strong financial profile that is underpinned by its leading innovation capabilities and favorable secular growth trends in precision agriculture. ARAG is projected to generate €155 million in sales in FY2023, and the transaction reflects a valuation of approximately 16.5 times ARAG’s projected 2023 EBITDA. Upon completion of the acquisition, ARAG will operate as a division in Nordson’s Industrial Precision Solutions segment.

ARAG is privately held by funds advised by Capvis AG, a European mid-market private equity firm that acquired the business in 2020 from its founders, who, alongside management, have remained invested during Capvis holding period. Andreas Simon, Capvis partner, and head of Industrial Technology, said, “ARAG is best positioned today to continue its impressive growth trajectory with Nordson in the field of precision spraying solutions. We wish Nordson and the management team well for the future.”

In conclusion, Nordson’s acquisition of ARAG sets the stage for enhanced crop yields and sustainability in the agricultural sector. With Nordson’s strong brand, financial backing, and commercial infrastructure combined with ARAG’s innovative precision spraying, dispense, and software solutions, customers can expect improved crop yields while sustainably reducing the usage of fertilizers and chemicals.