Agco Corp. (NYSE:AGCO), a builder and distributor of tractors and other farm machinery, is acquiring Cimbria Holdings Ltd., which makes equipment for seed and grain handling.

Agco, based in Duluth, Georgia, will pay about $340 million to private equity firm Silverfleet Capital for the Thisted, Denmark-based company, and the deal is expected to close by Sept. 30. Silverfleet, based in London, purchased Cimbria in 2013. Cimbria then expanded into the Middle East markets and opened a new plant in the Czech Republic. About 15 percent of Silverfleet’s investors are from the U.S.

Cimbria’s products and services help clean, dry, store and move grain and seeds, with about $240 million in annual sales concentrated in Western Europe, along with customers in Eastern Europe, Africa and the Middle East. The target has four plants in Denmark, Austria, the Czech Republic and Italy.

Martin Richenhagen, Agco’s CEO, says the Cimbria acquisition will significantly enhance the company’s market position in the European grain handling and storage industry, as well as helping with marketing and cost savings. Agco has five core brands: Challenger, Fendt, Massey Ferguson and Valtra, which include lines of tractors, harvesters and other field equipment, along with GSI grain storage and animal feeding systems. Agco’s products are sold in 140 countries, and generated 2015 net sales of $7.5 billion.

M&A in the agriculture supplier sector has been driven by the rising global population’s demand for food, as well as technology advancements and consumer trends. In the realm of larger-than-middle-market deals, Bayer AG is offering $62 billion to buy Monsanto Co. (NYSE: MON) in an attempt to become the largest seller of seeds and farm chemicals. In May, Lariat Partners invested in Willowood USA, a maker of herbicides, fungicides and insecticides for agriculture. In April, Advent International announced plans to acquire Viakem SA de CV, a producer of chemicals used in agriculture.

Rabobank is Agco’s financial adviser on the deal and Herbert Smith Freehills as legal adviser. Silverfleet used Baird as corporate finance adviser, Travers Smith and Accura as legal advisers, Deloitte as financial and tax due diligence adviser along with Roland Berger for commercial due diligence.

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