Farmers are tasked to grow more food than ever for a rapidly rising global population, which is estimated to surpass 9 billion people by 2050. As a result, agriculture suppliers, including crop protection companies, have become attractive targets. Seed protectors are important tools that help farmers manage their fields. The demand for suppliers in these areas is driving M&A activity in the agriculture sector.

The merger of Land O’Lakes Inc. and United Suppliers Inc., which closed on Aug. 24, is one of a handful of deals that have occurred in the space. Land O’Lakes is known for making butter while United Suppliers owns the Exuro and Amsol/Plus herbicide brands. (Land O'Lakes also agreed to buy marketing company Farmer Lumpe + McClelland recently.)

When the deal between the two privately-held companies for an undisclosed amount was announced in June, Land O’Lakes CEO Chris Policinski pointed to technology advancements and customer demand for more services as drivers of consolidation in the industry. The two companies say the merger will give their customers more products to choose from in technology. Between mobile applications and drones, farmers have several technology products available at their disposal that can help them analyze their fields.

Keeping up with technology and changing consumer trends are the top reasons strategic buyers use acquisitions for growth in the agriculture business, which is what family-owned Wilbur-Ellis Co. of San Francisco has been doing. Since 2014, the supplier has acquired aerial sprayer Aero Spray Services Inc. and Poynter’s Ag Supply. “We will continue to look to acquire, because we are a growing business,” says Dick Barrett, national director of acquisitions.

Wilbur-Ellis is not the only company harvesting targets in the sector. In 2014, Platform Specialty Products Corp. (NYSE: PAH) completed the $1 billion purchase of Chemtura AgroSolutions that expanded Platform’s presence in the agriculture chemicals space. Earlier in 2015, EI Du Pont De Nemours And Co. (NYSE: DD), said it will acquire biochemical company Taxon Biosciences Inc. for undisclosed terms.

The agriculture industry is fragmented, with plenty of opportunity for M&A. “There has been consolidation over the last 10 to 15 years and there will continue to be consolidation,” says Barrett.

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