How CNH’s M&A ‘Black Belt’ Closes Deals

Heavy equipment maker CNH Industrial has a long history of mergers and acquisitions, sometimes overseeing iconic brands like Ferrari. But five years ago, when agtech was booming, the global giant was struggling to enter the startup scene.

The conglomerate turned to one of its longest-serving executives, an Italian businessman named Michele Lombardi.

Lombardi had come up through CNH’s business development group, part of what he describes as a “black belt team” that built corporate alliances at the highest levels. When the company came to him in 2019 with this new assignment, he was essentially starting a new chapter “from scratch.”

“They were stuck and couldn’t build a pipeline of successful transactions,” Lombardi told TechCrunch. “When we started, we knew we had a very limited reach. We didn’t have any network.”

How do you do that? Just start talking, Lombardi explained. Specifically, he went straight to venture capital firms, knowing that many of them would be looking for exits for their investments in startups building things like autonomous farm equipment or precision farming data.

Those conversations led to more connections, and in just a few years, his growing team — which now numbers about 14 employees — built the missing path to interesting startups and founders.

That work has led to 12 deals over the past five years, split between six acquisitions and six minority investments. They span the tech spectrum, from farm management software to AI-powered drone imaging, satellite navigation and even tractor companies.

Lombardi’s team’s success has come at a time when, like many other sectors, venture capital investment in agtech has been hard to come by. Valuations, total investment and exits are all below their peaks of a few years ago, according to data from PitchBook.

This drought has proven to be a golden opportunity for companies like CNH, sparking an arms race of investment and acquisitions as they seek to dominate the new technology market.

“Now is a really great time” to be in corporate venture capital, he said. “Now is the time when you can really help, when you can really come in and be a good partner. There are phenomenal opportunities out there, a lot of troubled entrepreneurs. And it’s a great time to identify good ideas that are maybe more affordable.”

Like other industries, Lombardi said agritech went through a “euphoria phase” three or four years ago, which he believes has inflated valuations “a little too much.”

“This decline will be painful, but we’ll clear the landscape a little bit, both from investors who maybe don’t have the knowledge and experience to be in this space, and from startups that probably never had a well-formed idea or something that would ultimately become a competitive advantage that would make them a sustainable company,” he said. “The whole landscape will come out much, much stronger. And I think it’ll be great to be in this space with the experience that we’ve developed over this period.”

The career he was born to be

To expand his network, Lombardi drew on his 20 years of experience at CNH, where he managed various divisions of the sprawling farm and construction equipment company.

He joined the company as it was undergoing a massive restructuring that included the merger of Case and New Holland (hence the modern consolidated name). His early days were spent in CNH’s business development group in Italy, which he describes as a holding company that sat on top of a wild cornucopia of companies, including Fiat, Ferrari and even a newspaper.

Over the next 20 years, he managed parts of CNH’s operations in Switzerland, Thailand, China, Australia and New Zealand. With each position, Lombardi acquired new skills. For example, while in Thailand, he oversaw all of the conglomerate’s operations in Southeast Asia as it grew from a $40 million business to a $400 million business.

That wealth of experience has had a direct impact on the work he’s been doing since 2019, when he says he was “smuggled” back to Chicago to lead CNH’s investment, mergers and acquisitions team.

On the investment side, Lombardi emphasizes a key difference between being a VC and running a venture capital firm. “Our job is not to just make an investment and get a return,” he explained, shifting a bit from side to side at his standing desk. “My lens is different, right? I invest in companies when I think they can accelerate my technology roadmap.”

Lombardi can focus less on profits, since CNH has brought in about $20 billion in revenue in each of the past three years. That gives him the freedom to think more strategically about where his team gives money—something other investors might not have, especially when the funding market has dried up.

When it comes to M&A, Lombardi says he likes to bring in people from all the different CNH organizations when he’s evaluating a startup. Those are the people who will tell him, “Yes, I like this technology team, I like their solution, I like their product, we think it’s going to make a difference in our industry,” he says.

Lombardi says his team often looks beyond investments and M&A as it looks to supercharge CNH’s capabilities. And it leverages the company’s global reach to track developments in all types of different markets.

“We have a mapping of existing startups at different maturity levels before any advisor came to us and offered us anything, and we spontaneously reach out to entrepreneurs and talk to them, understand what they’re doing,” he said. “We often create opportunities for collaboration that don’t necessarily lead to investment, but help the startup, help our industry around us grow with more confidence and educate us.”

Lombardi likes to look these entrepreneurs in the eye, so he prefers in-person or video calls when possible. Lombardi said he has to look someone in the eye—and watch how they answer questions—to determine whether he wants to work with them.

“I learn a lot from this, more than I learn from a speech,” he mused. “Entrepreneurs are very, very good at giving 10-minute speeches. I’m not particularly interested in that. I mean, I can sell you anything. That’s not what I want. I’m not going to learn anything from this. I’m not going to understand or be able to help.”

He added that for him it is more important to observe the other person, their reactions, whether they will open up and show their weaknesses.

“And that builds a sense of whether or not I want to spend more time with that person,” he said. “I mean, that’s super important. And there are so many of them, right? So how do I make a choice? I choose based on the intelligence that I see and how willing they are to cooperate.”