Hardware and software cultivation solutions developer AgrifyCorporation(NASDAQ:AGFY) announced Monday it has acquired Precision Extraction Solutions and Cascade Sciences, two of the leading companies in the extraction, post-processing and testing equipment and solutions space, from Sinclair Scientific.
What Happened
Agrify acquired Precision and Cascade for $50 million.
$30 million were paid in cash and $20 million in value of Agrify common stock. The total purchase price may be adjusted to up to $65 million based on the performance of the Cascade and Precision businesses for the fiscal year ending December 31, 2021.
Why It Matters
With the addition of Precision and Cascade, Agrify has expanded its core business beyond cultivation by gaining instant access to complementary and highly attractive areas of the supply chain.
Precision and Cascade offer cutting-edge technologies and end-to-end service solutions for cannabis and hemp extraction and post-processing. These leading brands have collectively worked with more than 30 multi-state operators and more than1,000 cannabis and hemp customers.
Precision and Cascade expect to generate approximately $40 million in revenue in 2021 with positive EBITDA.
“We are thrilled to announce the acquisition of Precision and Cascade, two companies that share our strong commitment and passion for delivering leading-edge solutions and exceptional customer service to the cannabis and hemp industry,” saidRaymond Chang, CEO of Agrify. “Precision and Cascade have stellar reputations and powerful leadership positions in their respective spaces, which is a perfect complement to our existing business and should allow us to leverage new competitive advantages and synergies in order to accelerate our growth plans.”
What’s Next
As a result of this transaction, Agrify now has a physical presence in seven U.S. states, with a growing number of clients and business partners distributed throughout the country.
The acquisition is projected to nearly double Agrify's 2021 revenue and is immediately accretive with positive gross margins and EBITDA contribution.
“We are proud to partner with Agrify to create the most vertically integrated total solutions provider in the cannabis and hemp market,” saidNick Tennant, founder and chief technology officer of Precision. “We have seen firsthand that customers are craving best-in-class solutions that address the many challenges they encounter across the supply chain from a single trusted source. With a diverse suite of cultivation and post-harvest solutions, our combined organizations are poised to leverage our additional scale to become a dominant force within the industry.”