Brief: US vertical farming group AeroFarms joins unicorn club, strikes SPAC deal to go public

• US vertical farming startup AeroFarms has agreed a merger with Spring Valley Acquisition Corp, a special purpose acquisition company (SPAC). The deal will see AeroFarms go public on New York’s NASDAQ exchange under the symbol ‘ARFM’.
• The transaction could allow Newark-based AeroFarms to raise as much as $357 million in gross proceeds, including Spring Valley’s $232 million cash reserves plus $125 million to be secured via a private investment in public equity (PIPE) deal from institutional investors, AeroFarms executives, and Spring Valley sponsor Pearl Energy Investments.
• The merger is expected to close in Q2 2021 with the combined company estimated to be valued at $1.2 billion.

Why it matters:

SPACs were the investment story of 2020, with the annual number of SPAC IPOs hitting 248 (from just one in 2009) and over $83 billion invested compared to $13.6 billion in 2019. In February 2021 alone, a record $109 billion closed across 50 SPAC transactions globally, according to new data cited in the Financial Times.

What the SPAC?! A brief explainer on the next exit tool for agrifoodtech investors – read it here

Last month, US indoor farming startup AppHarvest went public at a valuation of over $1 billion after its $475 million acquisition by SPAC Novus Capital Corp.

US real estate investment trust Alexandria Real Estate Equities recently launched its own agrifoodtech-focussed SPAC, while The Production Board — a food and biotech venture builder headed by The Climate Corporation co-founder David Friedberg — has also established a SPAC.

AeroFarms is a certified B Corporation and sells its Dream Greens brand of vertically-grown vegetables through retailers including Whole Foods, ShopRite, Amazon Fresh, and FreshDirect.