Freight Farms, Inc. and Agrinam
Acquisition Corporation have signed a definitive agreement for a
business combination with a pro forma market cap valuation for the
combined entity of approximately US$147
million
TORONTO and BOSTON, Oct. 4, 2023
/PRNewswire/ -- Agrinam Acquisition Corporation (TSX:AGRI.U)
("Agrinam") and Freight Farms, Inc. ("Freight
Farms"), a rapidly growing innovative agtech company and a
leader in the global revolution for sustainable, hyper-local and
ultra-fresh food production, today announced they have entered into
a definitive business combination agreement (the "Definitive
Agreement") among Freight Farms, Agrinam and Agrinam Merger
Sub, Inc., a wholly owned subsidiary of Agrinam ("Merger
Sub"), which sets out the terms of a business combination
whereby Agrinam will acquire all of the issued and outstanding
shares of Freight Farms by way of a triangular merger (the
"Business Combination"). Freight Farms and Agrinam
previously announced that they had entered into a letter of intent
in respect of the Business Combination on September 7, 2023. If consummated, it is
anticipated that the Business Combination will constitute Agrinam's
qualifying acquisition under Part X of the Toronto Stock Exchange
("TSX") Company Manual.
In connection with the Business Combination, Agrinam and Freight
Farms have also agreed to use commercially reasonable efforts to
complete a PIPE financing with certain strategic and financial
investors at or prior to completion of the Business
Combination (the "PIPE Financing"), whereunder Agrinam
and Freight Farms intend to raise US$20
million net of transaction expenses from the existing
Agrinam sponsor (Agrinam Investments, LLC) and certain strategic
and financial investors, inclusive of funds in Agrinam's escrow
account at the time of closing of the Business Combination.
Freight Farms has established itself as a global leader in
modular container farming technology with more than 600 farms sold
worldwide. Its sales have been robust, which reinforces its strong
growth trajectory, with US$23 million in revenue in 2022.
Freight Farms' flagship product, the Greenery™, delivers impressive
results where you can grow the same amount of product as in a 2.5
acre open field farm and produce 1,000 heads of lettuce per week,
all within a 40´ container. Freight Farms benefits from multiple
revenue streams including modular farm sales, a subscription-based
software platform, and consumables for diversified income. Freight
Farms serves a wide range of clients, including small business
farmers, corporations, schools, universities, municipalities, and
nonprofits.
Investment Highlights
- Largest Network of Modular Container Farms in the World:
Strong and well-established brand image, bolstered by consistent
growth and client satisfaction, places Freight Farms as a global
leader leveraging the largest network of more than 500 IoT
connected farms currently operated by their customers.
- Unique Product Offering Enables Recurring Revenue Business
Model: With a distinctive product line including the Greenery™,
the Garden, proprietary plant nutrients, and Farmhand® software,
Freight Farms' growing installed base of hardware and software
customers is beginning to enable a recurring revenue business model
that maximizes customer success.
- Significant Growth Potential with Near Term Backlog in
Place: Freight Farms has significant potential for strategic
expansion into new markets, proven by its footprint in 40
countries, and a backlog of near-term orders exhibits high demand
for their products.
- ESG Impact: Through practices like water, soil and
land conservation and pesticide-free farming, Freight Farms
exhibits an unyielding commitment to sustainable and
environmentally friendly farming.
- Compelling Financial Model: Impressive sales growth
forecasts underscored by growing demand for the Greenery and
the new Garden model, recurring software sales to customers, and
long-term margin expansion potential.
Management Commentary
"We are thrilled to advance our
plans to partner with Agrinam," said Rick
Vanzura, CEO of Freight Farms. "We have uniquely positioned
Freight Farms as a leading technology provider that focuses on
serving farmers, so they can serve their local communities with
hyper local, hyper fresh produce. Freight Farms is distinctly
differentiated from warehouse vertical farms by being a technology
provider with proven customer economics, supporting hundreds of
profitable, successful businesses with a wide range of commercially
viable crops. Our growth strategy is anchored on three core
pillars: standardizing farming processes and operations, enabling
mainstream accessibility of advanced farming technology and
lowering barriers to entry from a location standpoint. Through this
transaction, we believe we will be sufficiently funded to continue
to execute on our global growth strategy and meet accelerating
customer demand by fulfilling our order backlog."
"Freight Farms has the world's largest network of IoT connected
modular farms and is garnering valuable data from the collective
experience of more than 1,000 farmers globally," said Zach Morse, a Freight Farms board member and
Senior Analyst at Ospraie Ag Science, Freight Farms' largest
investor. "This agtech innovator has demonstrated significant
revenue traction and we believe Freight Farms has built scale
meaningfully greater than its next largest direct competitor. A
significant portion of the world's arable land has eroded over the
last 40 years and accelerated 2 billion people around the world
living with water scarcity. 70% of fresh water is used by
agriculture, and large breakdowns in supply chains have led to
massive waste and gaps in produce availability, which was
exacerbated by COVID and the Ukraine war. Following the transaction with
Agrinam, Freight Farms will be well positioned to capitalize on
these long-term trends and the need for hyper local, hyper fresh,
and nutritious food."
"Freight Farms has a unique product offering that addresses the
needs of both profit and not-for-profit environments and we are
thrilled to enter into a qualifying acquisition with Freight
Farms," said Agustin Tristan Aldave,
CEO of Agrinam. "Freight Farms is poised to deepen it's already
significant penetration in North
America, while expanding globally with its compelling
products and technological capabilities. Freight Farms has set a
high standard in the modular CEA segment and is reinforced by a
strong ESG strategy and robust financial projections, for growth in
2024 and beyond. The container farming segment offers tremendous
whitespace opportunity and with Freight Farms, farms can go from
delivery to harvest in a very short time frame."
Transaction Overview
In accordance with the
terms of the Definitive Agreement, the Business Combination will
result in Freight Farms combining its corporate existence with
Merger Sub (thereafter, the "Surviving Company"), such that
the Surviving Company becomes a wholly-owned subsidiary of Agrinam.
Upon completion of the Business Combination, Agrinam is expected to
change its name to "Freight Farms, Inc." (the "New Freight
Farms") and will carry on the business of Freight Farms.
As consideration for the cancellation of existing Freight Farms
shares in accordance with the Business Combination, each Freight
Farms' shareholder shall receive, concurrently with closing of the
Business Combination, the right to receive such number of common
shares of New Freight Farms ("New Freight Farms Common
Shares") specified in the Definitive Agreement, with each such
New Freight Farms Common Share being issued at a price of
US$10.30. The Business Combination
values New Freight Farms at a pro forma market cap of approximately
US$147 million.
In connection with the Business Combination, Agrinam and Freight
Farms will also use commercially reasonable efforts to complete the
PIPE Financing. Securities issued in connection with the PIPE
Financing shall convert into or be exchangeable for, concurrently
with closing of the Business Combination, New Freight Farms Common
Shares at a price of at least US$10.30 per New Freight Farms Common Share.
The Freight Farms board of directors has determined that the
Definitive Agreement and the Business Combination are in the best
interests of Freight Farms and Agrinam's board of directors has
determined that the Definitive Agreement and the Business
Combination are in the best interests of Agrinam. In connection
with the Business Combination, Agrinam will also provide all
holders of Class A restricted voting shares the opportunity to
redeem all or a portion of their Class A restricted voting shares
in accordance with Agrinam's amended and restated articles dated
June 10, 2022, as amended
September 14, 2023.
Concurrently with or shortly after entering into the Definitive
Agreement, certain Freight Farms shareholders have entered, or will
enter, into lock-up agreements, pursuant to which such Freight
Farms shareholders agree not to, directly or indirectly, sell,
assign or transfer any New Freight Farms Common Shares issued to
them upon closing of the Business Combination, other than in
accordance with the provisions of the lock-up agreement.
Completion of the Business Combination is subject to approval by
the shareholders of Freight Farms and may be subject to approval by
the shareholders of Agrinam. It is also subject to a minimum cash
condition of US$8 million and various
other customary closing conditions, including, among others, the
filing of a final non-offering prospectus in accordance with the
rules of the TSX. The Business Combination is expected to close in
the first quarter of 2024.
A copy of the Definitive Agreement will be available under
Agrinam's profile on SEDAR+ at www.sedarplus.ca, which will contain
further information in respect of the Business Combination.
Advisors
BMO Nesbitt Burns Inc. and Canaccord Genuity
Corp. ("CG") are serving as financial and capital markets
advisors to Agrinam. CG's US affiliate, Canaccord Genuity LLC, is
serving as financial advisor to Freight Farms. Stikeman Elliott LLP
and Latham & Watkins LLP are acting as legal advisors to
Freight Farms, and Borden Ladner Gervais LLP and Dorsey &
Whitney LLP are acting as legal advisors to Agrinam.
Investor Conference Call Information
Freight Farms and
Agrinam leadership will host a joint investor conference call to
discuss the Business Combination on October
4, 2023, at 9:30 AM ET. The
conference call via webcast link, as well as an accompanying
investor presentation, can be accessed at
www.agrinamspac.com or directly here. Interested parties may
also listen to the prepared remarks via telephone by dialing (844)
512-2921, or for international callers, (412) 317-6671 and entering
meeting number: 153559. The telephone replay of the call will be
available until October 18, 2023 at
11:59 PM ET, and a replay of the
webcast will be archived at www.agrinamspac.com for
approximately 30 days.
About Agrinam Acquisition Corporation
Agrinam
Acquisition Corporation is a special purpose acquisition
corporation incorporated under the laws of the Province of
British Columbia for the purpose
of effecting, directly or indirectly, an acquisition of one or more
businesses or assets, by way of a merger, amalgamation,
arrangement, share exchange, asset acquisition, share purchase,
reorganization, or any other similar business combination within a
specified period of time. For more information, visit
www.agrinamspac.com.
About Agrinam Investments, LLC
Agrinam
Investments, LLC is a limited liability company formed under the
laws of Delaware and is controlled
by Demeter Capital, S.A.P.I. DE C.V. and Maquia Capital Financial
Group in their capacities as managers with extensive experience in
agribusiness projects across North
America. More information available
on www.agrinamcapital.com.
About Freight Farms
Founded in 2012, Freight
Farms debuted the first vertical hydroponic farm built inside an
intermodal shipping container with the mission of democratizing and
decentralizing the local production of fresh, healthy food. Since
its inception, Freight Farms has refined its product offering to
arrive at the Greenery™ container farm. With global customers
ranging from small business farmers to the corporate, hospitality,
retail, education, and nonprofit sectors, Freight Farmers make up
one of the largest network of IoT connected farms in the
world. AgTech Breakthrough named Freight Farms the 2022 "IoT
Monitoring Solution of the Year" for its farmhand® IoT automation
software. For more information, visit
https://www.freightfarms.com/.
Forward-Looking Statements
Certain information contained in this press release may be
forward-looking statements within the meaning of Canadian
securities laws. Forward-looking statements are often, but not
always identified by the use of words such as "expect",
"anticipate", "believe", "foresee", "could", "estimate", "goal",
"intend", "plan", "seek", "will", "may" and "should" and similar
expressions or words suggesting future outcomes. This press release
includes forward-looking information and statements pertaining to,
among other things, the Business Combination, the Business
Combination constituting the qualifying acquisition of Agrinam,
completion of the PIPE Financing, certain anticipated strategic,
operational and competitive advantages and benefits created by the
Business Combination, and future opportunities for New Freight
Farms.
These forward-looking statements reflect material factors and
expectations and assumptions of Agrinam and Freight Farms
including, without limitation, expectations and assumptions
relating to Agrinam and Freight Farms being able to receive all
required regulatory and shareholder approvals and current estimates
and assumptions regarding the Business Combination and its
benefits, which are based on Agrinam's and Freight Farms'
perception of historical trends, current conditions and
expectations, as well as other factors believed to be appropriate
in the circumstances. Agrinam's and Freight Farms' estimates,
beliefs and assumptions are inherently subject to uncertainties and
contingencies regarding future events and as such, are subject to
change. Pro forma, projected, and estimated numbers included in
this press release are used for illustrative purposes only, are not
forecasts and may not reflect actual results. Numerous risks and
uncertainties could cause the actual events and results to differ
materially from the estimates, beliefs and assumptions expressed or
implied in the forward-looking statements in this press release,
including, but not limited to: the conditions to the consummation
of the Business Combination may not be satisfied or waived; risks
relating to the failure to obtain necessary shareholder, court, and
regulatory approvals for the Business Combination; the filing
and/or mailing of documentation relating to the Business
Combination may not be completed on a timely basis; high levels of
redemptions by Agrinam shareholders; the anticipated strategic,
operational and competitive benefits may not be realized; the
Business Combination may be modified, restructured or terminated;
events or series of events may cause business interruptions; and
the availability of the PIPE Financing or other equity and debt
financing and/or refinancing on acceptable terms.
There are numerous risk factors related to the Business
Combination that investors should take into account, including,
without limitation: the success of New Freight Farms' operations
would depend on the New Freight Farms' ability to grow its
business; changes in domestic and foreign business, market,
financial, political and legal conditions; New Freight Farms'
financial targets may prove materially inaccurate or incorrect; a
prolonged labor dispute could hurt New Freight Farms' business; ;
New Freight Farms' business is likely to be subject to numerous
laws and regulations; litigation and other proceedings outcomes
could adversely affect New Freight Farms' business; New Freight
Farms' financial condition and operating results may be adversely
affected by foreign exchange fluctuations; the ability of New
Freight Farms to meet TSX or other stock exchange listing standards
following the consummation of the Business Combination; the market
price of the New Freight Farms Common Shares may be highly
volatile; the Business Combination may disrupt current plans and
operations of Freight Farms as a result of the announcement and
consummation of the Business Combination; costs related to the
Business Combination; the uncertainty of the projected financial
information with respect to Freight Farms; the effects of
competition on New Freight Farms' future business; the
enforceability of Freight Farms' intellectual property rights,
including its copyrights, patents, trademarks and trade secrets,
and the potential infringement on the intellectual property rights
of others; the Business Combination may not be completed within
Agrinam's permitted timeline to complete a qualifying acquisition
or the potential failure to obtain an extension of Agrinam's
qualifying acquisition deadline if sought by Agrinam; and other
factors discussed under "Risk Factors" in Agrinam's prospectus
dated June 10, 2022.
Readers are cautioned that the foregoing list of factors is not
exhaustive. Other risks and uncertainties not presently known to
Agrinam and Freight Farms or that they presently believe are not
material could also cause actual results or events to differ
materially from those expressed in the forward-looking statements
contained in this press release. Additional information on these
and other factors that could affect events and results are included
in other documents and reports that will be filed by Agrinam with
applicable securities regulatory authorities and may be accessed
through the SEDAR+ website (www.sedarplus.ca). Readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect Agrinam's and Freight Farms' expectations
only as of the date of this press release. Agrinam and Freight
Farms disclaim any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as expressly required by
law.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in
the United States. The securities
have not been and will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities
Act") or any state securities laws and may not be offered or
sold within the United States or
to U.S. Persons (as such term is defined in Regulation S under the
U.S. Securities Act) unless registered under the U.S. Securities
Act and applicable state securities laws or an exemption from such
registration is available.
For further information contact:
Investor Contact:
Reed
Anderson, ICR
FreightFarmsIR@icrinc.com
Media Contact:
Keil
Decker, ICR
FreightFarmsPR@icrinc.com
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