- US vertical farmer AeroFarms and special purpose acquisition company (SPAC) Spring Valley have scrapped their merger deal.
- The scuttled transaction, announced in March this year, would’ve seen Newark-based AeroFarms become a Nasdaq-listed public company. At the time, the deal was expected to raise $357 million in gross proceeds for the business, valuing it at $1.2 billion.
- AeroFarms and Spring Valley said in a statement that they “mutually agreed” to terminate the agreement. “We made this decision to ensure that AeroFarms is in an optimal position to pursue our growth strategy,” said AeroFarms co-founder and CEO David Rosenberg. “We believe proceeding with this transaction is not in the best interests of our shareholders.”
Why it matters:
Since the start of the year, six agrifoodtech SPAC deals have been announced — most involving indoor farming or biotech — but their viability is increasingly being called into question.
Three of these — AppHarvest‘s merger with Novus Capital, Ginkgo Bioworks‘ combination with Soaring Eagle Acquisition Corp, and Benson Hill‘s merger with Star Peak — have completed to date. [Disclosure: AFN‘s parent company AgFunder is an investor in Root AI, which was acquired by AppHarvest.]
2021 started out as year of the ag SPAC. How’s that going? Read more here
Greenhouse operator AppHarvest saw its share price nosedive -29% in August after slashing revenue targets it had set at the time of its SPAC deal. Ginkgo’s stock closed 12% down last week after activist short seller Scorpion Capital published a highly critical report of the company, describing it as “a hoax for the ages.”