AgriFORCE Growing Systems Announces Binding LOI to Acquire Deroose Plants NV, One of the Largest Tissue Culture Propagation Companies in the World
March 10 2022 - 8:50AM
AgriFORCE Growing Systems Ltd.
(“the Company") (NASDAQ:
AGRI; AGRIW), an intellectual property (IP)-focused AgTech
company dedicated to advancing sustainable cultivation and crop
processing across multiple verticals, has entered into a binding
letter of intent to acquire Deroose Plants NV (“Deroose”), one of
the largest tissue culture propagation companies in the world with
a leadership position in horticulture, plantation crops, and fruit
and vegetables.
Founded in 1980, Deroose has multi-national
operations in Europe, North America, and Asia, over 2.11 million
square feet of laboratory and greenhouse facilities1, and over 800
employees2. Deroose’s unaudited 2021 revenues were US$40.5
million(3) with EBITDA of approximately US$4.2 million (4).
The binding LOI is subject to completion of
standard due diligence and entry into a definitive purchase
agreement, which shall include commercially standard terms and
conditions, including, but not limited to, representations and
warranties, covenants, events of default and conditions to
closing.
The net purchase price by AgriFORCE is expected
to be approximately US$69 million. The purchase price represents
approximately $46.4 million for the Deroose business on a cash and
debt free basis and $22.6 million for the IP portfolio.
Transaction HighlightsThe
AgriFORCE acquisition of Deroose is expected to provide the
following strategic benefits:
- Strengthens AgriFORCE’s integrated
AgTech business model by providing a leading position in tissue
culture propagation and plant cultivation, including a robust IP
portfolio, aimed at delivering increased crop yields with a reduced
environmental footprint.
- Enables AgriFORCE and Deroose to
drive further growth in core markets for the development and trade
of horticulture, plantation crops, as well as fruits and
vegetables, building on Deroose’s IP, driving improved genetics and
higher yields.
- Building on Deroose’s strong
financial performance and consistent growth in multiple locations
across the world, AgriFORCE and Deroose plan for additional growth
through expansion into new and high value crops.
Ingo Mueller, CEO of AgriFORCE Growing Systems, commented:
“Adding to the momentum of our recent definitive agreement with
Delphy Groep BV (Delphy), we look forward to welcoming Deroose into
the AgriFORCE family of companies, as we continue to move forward
with our vision to become a world leader in delivering
next-generation foods and plant products for businesses and
consumers. Our two companies are strongly aligned with transforming
the agriculture industry through IP, innovative technologies and
expertise that enable cleaner, better crops with reduced
environmental impact. Deroose’s specific crop IP enables increased
yields per hectare for crops such as rubber, palm and banana. This
is particularly important where arable land is scarce and
restricted(5) and with governments no longer allowing additional
land to be made available for these crops. We believe this
positions AgriFORCE and Deroose to deliver value by maximizing the
sustainability and productivity of available land, especially in
tropical climates. In addition, we believe Deroose’s IP provides
significant barriers to entry to potential competitors, given the
robust patent estate, and typical timelines to research and develop
such processes, which could easily exceed a decade. Finally, with
the Deroose acquisition, we see opportunities to capitalize on a
variety of business synergies, including building on Deroose’s
Florida Campus to replicate Delphy’s R&D innovation center for
the North American markets.”
Maurice van Winden, the CEO of Deroose Plants NV, added: “With
over 40 years of history, Deroose is a highly innovative company
specialized in tissue culture propagation, and we are very excited
to join AgriFORCE. Both our IP and vision are highly complementary,
as we are committed to growth through the development of new
plants, new cultivation techniques, and pursuing new market
opportunities. We are extremely excited about commercializing our
new portfolio of genetics for plantation and food crops. We
have invested over a decade in development of this IP and believe
we can significantly improve the impact that these crops have on
the environment, while providing much needed supply sources to the
rubber and food industries. Furthermore, strengthening our foothold
in North America and accelerating growth into new crops is a strong
focus for us in the years ahead.”
(3)Euro to US Dollar Spot Exchange Rates for 2021: Average
exchange rate in 2021: 1.183 USD(4)EBITDA Reconciliation
|
|
2021 (Forecasted) |
|
|
(in US$ ‘000’s) |
|
Net income |
|
1,644 |
|
Depreciation and
Amortization |
|
1,867 |
|
Interest expense |
|
919 |
|
Income tax expense |
|
515 |
|
Nonrecurring items |
|
(735 |
) |
EBITDA |
|
4,210 |
|
(5)United Nations General Assembly October 14, 2019
About Deroose Plants NVThe
Deroose Plants Group is a global supplier of young plant material
for growers and plantation owners. Propagation-as-a-service is also
offered to young plant breeders and propagators. The Company has
been active in tissue-culture cloning of plants since 1980.
Currently Deroose Plants are produced in locations in Europe, USA
(Florida) and Asia. Deroose is one of the biggest T.C. propagators
in the world, with over 800 employees.
About AgriFORCEAgriFORCE
Growing Systems Ltd. (NASDAQ: AGRI; AGRIW) is an AgTech company
focused on the development and acquisition of crop production
know-how and intellectual property augmented by advanced AgTech
facilities and solutions. Looking to serve the global market, the
Company’s current focus is on North America, Europe and Asia. The
AgriFORCE vision is to be a leader in delivering plant-based foods
and products through advanced and sustainable AgTech solution
platforms that make positive change in the world—from seed to
table. The AgriFORCE goal: Clean. Green. Better. Additional
information about AgriFORCE is available at:
www.agriforcegs.com.
Follow AgriFORCE on Twitter: @agriforcegsFollow
AgriFORCE on Facebook: AgriFORCE Growing Systems Ltd.Connect with
AgriFORCE on LinkedIn: AgriFORCE Growing Systems Ltd.
This press release contains forward-looking
statements within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. Statements
other than statements of historical facts included in this press
release may constitute forward-looking statements and are not
guarantees of future performance, condition or results and involve
a number of risks and uncertainties. Actual results may differ
materially from those in the forward-looking statements as a result
of a number of factors, including those described from time to time
in our filings with the Securities and Exchange Commission and
elsewhere. The Company undertakes no duty to update any
forward-looking statement made herein. All forward-looking
statements speak only as of the date of this press release.
Company Contact:Ian PedersenTel: (604)
757-0952Email: ipedersen@agriforcegs.com
Investor Relations:Crescendo Communications,
LLCDavid Waldman/Natalya RudmanTel: (212) 671-1021Email:
AGRI@crescendo-ir.com
Media Relations:Denise SabetTel: (604)
757-0952Email: dsabet@agriforcegs.com
1 As per management’s previously audited financial statements. 2
https://derooseplants.com/our-company--history/
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