2nd December 2022
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Corporate Deals Stock Market

urban-gro Acquires Engineering Firm, DVO To Complete Its Offering

urban-gro revenue on second quarter

Bolsters Engineering Solutions by Adding Over 20 Individuals with Significant CEA and Industrial Experience 

Highly Accretive and Synergistic Transaction Expected to Bring Immediate Incremental Revenue and Margin Opportunities

www.urban-gro.com (Nasdaq: UGRO), announced it has signed a binding letter of intent to acquire Dawson Van Orden, Inc, a world-class engineering firm with significant experience in indoor CEA.

In addition to mechanical, electrical, and plumbing engineering services, the acquisition of the 24-person, Texas-based firm will add fire protection engineering expertise and further urban-gro’s industrial architecture capabilities. The enhancement of these offerings is expected to create new opportunities, as well as build upon DVO’s existing contracts and clients in the indoor CEA and industrial sectors.

Bradley Nattrass, Chairman, and CEO of urban-gro commented, “The addition of DVO represents an extraordinary opportunity to add depth and breadth of indoor CEA engineering expertise to our professional services offering. While this accretive and synergistic transaction increases our professional services revenues and margins along with future opportunities to leverage their existing clients, it also immediately adds a deep bench of talent and an engineering leadership structure to scale and meet the rising demand for our turnkey design-build solutions. Furthermore, I’m excited about the opportunity to continue strengthening our presence in Texas, as we expect the state to be an influential future business opportunity as Cannabis legalization is considered.”

The Company will fund the USD 7.25 million transaction, which includes a contingent consideration of up to USD 1.1 million paid in cash or equity at the Company’s discretion, through a combination of USD 1.3 million in cash, a seller’s note of USD 3.8 million paid out over four quarters, and USD 1.1 million of UGRO common stock at a pre-set price of USD 4 per share. DVO generated approximately USD 5.5 million of revenue and greater than 20% EBITDA in the trailing twelve-month period ended September 30, 2022.  The Company expects to close the acquisition in the fourth quarter 2022 with the acquisition being accretive to earnings in its current fiscal year.

The company this year acquired EM Consutruction Management earlier this year which, according to the company, led to them to generate over USD 50 million in signed contract during the third quarter of the year.

Image provided by urban-gro

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