US vertical farming operator Kalera has agreed to merge with Nasdaq-listed special purpose acquisition company (SPAC) Agrico Acquisition Corp in a deal that will value the combined entity at $375 million.
The transaction is expected to close in Q2 2022, at which time Kalera will delist from the Euronext Growth Oslo exchange where it is currently traded to become a publicly-listed company with its common shares traded on the Nasdaq.
Kalera says the infusion of capital from the deal will enable the company to build out the next generation of its vertical farms around the US and internationally, adding to its 10 existing farms that are either in operation or under construction.
A Nasdaq listing will represent a major branding boost for Kalera, should the deal go through. However, controlled environment agriculture (CEA) companies don’t have a great track record so far when it comes to going public via SPAC deals. Last year, vertical farming operator AeroFarms terminated its $1.2 billion merger with SPAC Spring Valley. High-tech greenhouse operator AppHarvest, which merged with Nasdaq-listed Novus Capital in February of 2021, has watched its share price plummet in the past year, including a 21% drop this week. Kalera itself has seen mediocre performance on the Oslo Euronext exchange, where the company traded at just 8.07 kroner ($0.91) at the end of January, down from 48 kroner ($5.44) nearly a year ago.
Commentators have argued that vertical farming may be headed towards a “trough of disillusionment” with a decrease in the number of venture-backed deals being closed and overall traction that’s underwhelming despite several high-profile fundraises in recent history.
The next few months will tell if Kalera can turn this seemingly downward trend around. The Orlando, Florida-based company has farms in its hometown as well as Atlanta, Georgia and Houston, Texas. It also operates a farm in Kuwait via its acquisition of CEA company &ever and has six more farms under construction. Kalera earlier acquired Vindara, which specializes in seed breeding for indoor ag.
“Kalera and Agrico together form a team with the expertise to bring Kalera’s fresh, clean and sustainable Local Living Lettuce to consumers across the globe,” Curtis McWilliams, interim CEO of Kalera, said in a statement.
“At Kalera, we believe we have a business model that can bring nourishment across the globe while reducing environmental impact.”
The two companies said that Kalera’s management team will remain in place once the transaction closes.
“The proposed merger with Agrico positions Kalera to be the first leafy green vertical farm company to have a national footprint in the US and [to] be able to reliably supply a national offtake contract while still being local,” said Brent de Jong, chairman and CEO, Agrico.
Vertical farming should be one instrument in a farmer’s toolbox, not the whole operation or the farmer’s competition