AgriFORCE Growing Systems Announces
Binding LOI to Acquire Deroose Plants NV, One of the Largest Tissue
Culture Propagation Companies in the World
Deroose acquisition brings
multi-national operations, over 2.11 million square feet in
laboratory and greenhouse facilities, and a proprietary
portfolio
of genetic IP for plantation and
food crops
Deroose's unaudited 2021 annual
revenues were US $40.5 million
with EBITDA of approximately US
$4.2 million
VANCOUVER,
B.C. - March 10th, 2022 --
InvestorsHub NewsWire -- 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
facilities[1],
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 Highlights
The 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 NV
The 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 AgriFORCE
AgriFORCE 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:
@agriforcegs
Follow 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
Pedersen
Tel:
(604) 757-0952
Email:
ipedersen@agriforcegs.com
Investor
Relations:
Crescendo
Communications, LLC
David
Waldman/Natalya Rudman
Tel:
(212) 671-1021
Email:
AGRI@crescendo-ir.com
Media
Relations:
Denise
Sabet
Tel:
(604) 757-0952
Email:
dsabet@agriforcegs.com