25th June 2022
Mergers & Acquisitions

AgriFORCE Intends To Acquire Deroose Plants After Delphy Acquisition Leading To Stock Price Soaring

AgriFORCE Growing Systems Ltd. (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. This news comes week after the company acquired Delphy, a leading horticulture consultant.

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.

This LOI happens a couple of weeks after the company has announced that it has entered into a definitive agreement to acquire Delphy Groep BV (Delphy), a Netherlands-based AgTech consultancy firm, for US$29 million through a combination of cash and stock.

Ingo Mueller, CEO of AgriFORCE Growing Systems, commented on a recent press release: “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.”

“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.” – Ingo Mueller, CEO of AgriFORCE

 

“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 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 centre for the North American markets.”

 

How Did Markets React?

The least we can say is that the market has been very bullish about AgriFORCE in recent weeks as the stock price has soared by over 180% since the announcement of the acquisition of Delphy on February 15th (Opening at 1.76 and closing at 3.19 on the 11th of March). Since today’s opening, the price has soared by over 40% reaching 4.6 at 11 AM EST on a 1-hour interval.

This increase comes against the general market sentiment, dominated by fears over the Russia – Ukraine war and expectations to global food supply chains will be disrupted in the upcoming weeks.

 

Investors were attracted by the increasing IP knowledge the company has acquired through both deals and the increasingly dominant position of AgriFORCE in the Controlled Environment Agriculture sector.

 

Disclaimer: The content of this webpage is not investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives and specific financial circumstances.

 

Please do your own research and contact a professional financial advisor who will take into account your personal situation before making recommendations.

 

Neither of the employees in iGrow News nor the author, Sepehr Achard, have recently acquired positions in AGRI.

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