Agrinam Acquisition Corporation, a BC-based acquisition corporation, and Freight Farms, Inc., a US container farm supplier, entered into a binding letter of intent for a proposed business combination transaction.
The proposed business combination ascribes a pro forma enterprise valuation of approximately US$147 million based on certain assumptions. Under the terms of the LOI, Agrinam and Freight Farms would become a combined entity, with existing Freight Farms' shareholders exchanging 100% of their shares for equity in the combined public company.
"We are very excited about the partnership with Agrinam to take our business to the next level. Their understanding of the agtech space, coupled with a focus on sustainability and efficient use of resources, is closely aligned with our mission and values, making them the ideal partner. We believe the potential business combination with an exceptional partner in Agrinam will enable us to more aggressively scale our business to deliver sustainable, hyper-local food production to more customers across the world," said Rick Vanzura, CEO of Freight Farms.
Rick Vanzura pictured at the Indoor AgCon this year
Commenting on that, Agrinam's CEO, Agustin Tristan Aldave, said," "Agrinam was formed with the focused mission to identify and merge with a differentiated agribusiness company with a strong track record and a sustainable financial model. We believe we have found that with Freight Farms and are very excited about where this company will be in the near future. We've conducted significant diligence to date and have had detailed discussions with Rick and his exceptional team. We are confident that this transaction will deliver a highly compelling value proposition for shareholders. In addition to the strength of the management team is the scalability of Freight Farms."
Zach Morse, a Freight Farms Board member and Analyst at Ospraie Ag Science, Freight Farms largest investor, shared, "Ospraie Ag Science believes that end-customer requirements have created the demand for the truly local and clean footprint that indoor farming can provide, and we have invested in those indoor agriculture companies that we believe can supply farmers with the technology, tools, systems, and inputs to meet customer requirements with high-returning unit economics. We're very excited to partner with Agrinam on the next phase of Freight Farms' growth as it becomes a platform company in indoor farming, which we anticipate to be accelerated by this potential business combination."
In connection with executing the LOI, Agrinam is targeting non-binding investment indications of approximately US$20 million from existing Agrinam sponsors and certain strategic investors. In addition, the Agrinam sponsor has delivered US$4 million to Freight Farms to demonstrate its commitment to the transaction.
Agrinam intends to announce additional details regarding the proposed business combination once a definitive agreement has been executed, which is anticipated to occur in the third quarter of 2023.
Completion of the proposed business combination with Freight Farms is subject to, among other matters, the completion of due diligence, the negotiation of a definitive agreement providing for the proposed transaction, satisfaction of the conditions negotiated therein, regulatory approvals, including approval of the Toronto Stock Exchange, and approval of the transaction by the board and shareholders of both Agrinam and Freight Farms. There can be no assurance that a definitive agreement will be entered into or that the proposed transaction will be consummated on the terms or timeframe currently contemplated or at all.