Satellite group seals deal to focus on farming
Hemisphere GPS has realised plans to stake its futures on agriculture by selling its non-farming operations to a Chinese peer, which has a basketball star as a major shareholder, and changing its name again – this time to AgJunction.
Shares in the group soared 10.2% in Toronto to close at Can$0.97.
The satellite data company, founded in Canada in 1990 as Canadian Systems International said it had sold in non-agricultural operations, which include land survey, construction and marine businesses, to Beijing UniStrong Science & Technology for $15.0m.
The sale to the Shanghai-listed group, which was already a reseller of Hemisphere GPS services, comes four months after Hemisphere GPS installed its then vice-chairman, Rick Hein-ger, as chief executive, following a difficult period for the group.
Its shares price tumbled from a 2008 high of nearly Can$5.00 to Can$0.56 in August last year.
Mr Hein-ger in November, unveiling a widening to $2.8m in third-quarter losses, revealed plans to focus on an agricultural market he saw a "entering a period of exceptional opportunity".
'Expanding market opportunities'
Announcing the deal with UniStrong, he said that the sale "reflects our focus on the core platforms necessary to extend our leadership in precision agriculture.
"The result is a streamlined business which can more effectively capitalise on the expanding market opportunities in agriculture."
Satellite technology improves efficiency in farming through, for example, field maps which identify higher and lower yielding areas, and enable fertilizer applications to be adjusted accordingly.
It can also ensure that pesticide and fertilizer applications are not overlapped as sprayers move up and down fields, so saving costs.
There is some talk that in the future satellite positioning could allow tractors to undertake field work without human control.
What's in a name?
The renaming as AgJunction, one of the group's major agricultural brands, represents the group's fourth rechristening in its 23-year history, with its previous names also including Communication Systems International and CSI Wireless.
However, while the group is also under Mr Hein-ger's revamp relocating from Calgary in Canada to Hiawatha - a town of 4,000 people in Kansas state, and some 70 miles from Kansas City – it confirmed it would be retaining its listing in Toronto, with a new ticker symbol of AJX.
Other agriculture groups to rebrand of late include Corn Products International, now called Ingredion, although Tate & Lyle has stuck with its historic name despite selling the sugar operations on which the group was built.
Beijing UniStrong Science & Technology, which is based in the Chinese capital, was launched in 1994, and now claims eight branches, on the Chinese mainland, in Hong Hong and Singapore.
UniStrong became famous for having as a major shareholder Yao Ming, the former Houston Rockets basketball star, who took stock in return for endorsing the company.
Yao Ming's current stake is 1.05m shares, 0.6% of the company, making him the sixth biggest shareholder, according to Reuters data.
The Unistrong chairman, Guo Xin Ping, owns 45% of the company.