Nature's Miracle Holding (NASDAQ: NMHI), a California-based controlled environment agriculture technology firm, is set to acquire Agrify Corp. (NASDAQ: AGFY), a prominent player in the cannabis production technology industry. The acquisition deal, which was announced recently, values Agrify's equity at approximately $6.3 million.
As per the terms of the agreement, Nature's Miracle will issue 0.45 of its common shares for each share held by Agrify's shareholders. Raymond Chang, the current CEO and Chairman of the Board at Agrify, will step into a new role as the President of the Agrify division at Nature's Miracle, in addition to joining the company's board.
This acquisition extends beyond share exchange; Nature's Miracle has committed to purchasing $750,000 worth of LED lighting from Agrify. Additionally, Nature's Miracle will acquire debt from Agrify that is held by entities controlled by Chang, with the payment to be made in a mix of cash and stock. The specifics of this payment have not been disclosed.
The closure of the deal is anticipated within the next six months, according to statements from both companies. Nature's Miracle has expressed confidence that this acquisition will significantly enhance its revenue streams by integrating Agrify's advanced software-as-a-service (SaaS) and AI technologies into its vertical farming operations. Moreover, Agrify's dominant position in the cannabis extraction market is expected to further bolster revenue growth.
Nature's Miracle has highlighted the need for consolidation within the indoor growing industry and views the acquisition as a strategic move to align with one of the most skilled and innovative teams in the sector.
Despite these developments, Agrify's financial health has been a subject of concern. The company, based in Troy, Michigan, recently disclosed its earnings for the fourth quarter and the full year, reporting a modest quarterly net income of $572,000 against an annual net loss of $18.7 million. In its latest 10-K annual report, Agrify has acknowledged substantial doubts about its ability to continue as a going concern, casting a shadow over its future operations despite ongoing improvements and turnaround efforts.
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