AgriFORCE & Delphy reports reduction in upfront purchase price plus addition of earnout reflecting mutual confidence in the outlook and further alignment of interests
AgriFORCE Growing Systems Ltd. (NASDAQ:AGRI), announced that following the definitive agreement to acquire Delphy Groep BV (Delphy) the parties have further agreed to mutually extend the closing date as part of an Amended Agreement, to allow for sufficient time to complete a Form 14A for shareholder approval. The transaction is expected to be completed in the current calendar year, subject to AgriFORCE shareholder approval.
The Amended Agreement will reduce the total purchase price from USD$29 million to USD$17.66 million, plus a potential earnout of up to USD$5.99 million over 2 years, based on achieving future performance milestones.
AgriFORCE CEO Ingo Mueller commented, “Due to the size of this planned transaction and the necessary adjustments to convert from Dutch GAAP to US GAAP where certain Government contract work is classified differently, the audit took longer than expected; however, Delphy has completed their audit and we are now looking to close the acquisition before year-end, subject to timely shareholder approval. We are extremely excited by Delphy’s robust capabilities and expanding customer base, and are more excited than ever about the potential revenue and operational synergies between our two organizations. Additionally, the reduction in the planned purchase price with the addition of an earnout component reflects the further alignment of our interests and our mutual confidence in the outlook for the business. Importantly, we believe this accretive acquisition will significantly transform our business and help catapult AgriFORCE onto the global stage.”
Jacco van der Wekken, CEO of Delphy, further noted, “We have worked hard to complete the audit and now look forward to building our strong relationship further. In the meantime, both AgriFORCE and Delphy have used this opportunity to put in place strategic plans, so we can hit the ground running immediately upon completion of the merger. Our two companies share an aligned mission and vision for the combined organization and believe the timing of this transaction will enable us to provide innovative solutions to the global food supply challenges through new production methodologies, advanced IP and the introduction of innovative products. In turn, we believe this will result in strong revenue growth and maximization of stakeholder’s value.”