Blake Croegaert on the Ag Tech M&A Reset and 2026 Outlook

Key Takeaways

• Valuations collapsed after 2016‑2022 ag‑tech boom
• OEMs report 20‑30% revenue drops, curbing strategic buys
• Buyers demand profitability; earnings multiples now lower than revenue multiples
• Private equity waits for stable profits; family offices hard to access
• Reverse acquisitions let tech firms buy established agronomy services

Pulse Analysis

The ag‑tech sector rode a valuation surge from 2016 to 2022, anchored by the Climate Corporation deal that set a lofty benchmark for precision‑ag acquisitions. Venture capital flooded the space, betting on future productivity gains rather than current cash flow. That optimism collided with a deteriorating farm economy, as major OEMs like Deere, AGCO and CNH posted double‑digit revenue declines, creating inventory backlogs and prompting a strategic retreat from external growth. The result was a rapid deflation of inflated multiples and a scramble for realistic exit routes.

Today’s buyers have shifted from promise to proof. Strategic acquirers and the few remaining private‑equity firms demand either clear profitability or a substantial, defensible revenue base before engaging. This creates a valuation paradox: once a startup turns profitable, it is judged on earnings multiples that are typically lower than the revenue‑based premiums it once enjoyed. Family offices offer patient capital that aligns with agriculture’s cyclical nature, yet they are notoriously opaque and difficult to court. An emerging workaround is the reverse acquisition, where tech‑focused firms raise capital to purchase established agronomy service businesses, instantly gaining market channels and cash flow without waiting to be bought.

Looking ahead, Croegaert positions 2026 as a reset point. Gradual improvements in commodity prices and farm margins should ease OEM pressure, reopening appetite for strategic M&A. By 2027, we can expect a resurgence of corporate carve‑outs and roll‑up opportunities as large agribusinesses prune non‑core assets and seek scale through acquisitions. Investors who have weathered the downturn by securing patient capital or positioning for reverse deals will be well‑placed to capitalize on the next growth cycle, while startups must prioritize demonstrable profitability to attract the limited pool of buyers now active in the market.