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Cannabis production technology company Agrify Corp. is being acquired by controlled environment agriculture tech firm Nature’s Miracle Holding in a deal that values Agrify’s equity at roughly $6.3 million.
The total value of the deal was not disclosed.
Under terms of the transaction, Upland, California-based Nature’s Miracle will issue 0.45 common shares to Agrify shareholders for each Agrify share they own, according to a Wednesday news release.
Agrify CEO and board Chair Raymond Chang will become president of Nature’s Miracle’s Agrify division and sit on the company’s board.
Additional terms
The deal also involves Nature’s Miracle buying $750,000 worth of LED lighting from Agrify.
Finally, Nature’s Miracle will purchase Agrify debt owned by companies controlled by Chang, paying with an unspecified combination of cash and stock.
The deal is expected to close within six months.
Nature’s Miracle said in the release that acquiring Agrify “is expected to bring a meaningful revenue stream for Nature’s Miracle through Agrify’s powerful (software-as-a-service) and AI technology which can be applied to Nature’s Miracle’s vertical farming business, while its leading market share in cannabis extraction continues to drive revenue growth.”
“We believe the indoor growing industry is in need of a major consolidation and we are glad to have the opportunity to team up with one of the most impressive and experienced teams in the industry,” Chang said in a statement.
Agrify viability in question
Troy, Michigan-based Agrify reported fourth-quarter and full-year earnings earlier this week, showing a quarterly net income of $572,000 and an annual net loss of $18.7 million.
The company “continued to see improvements and make progress on our turn-around,” CEO Chang said in a statement.
However, Agrify reported in its latest 10-K annual report there’s “substantial doubt about our ability to continue as a going concern.”
Both companies trade on the Nasdaq exchange, Agrify as AGFY and Nature’s Miracle as NMHI.
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