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Nature's Miracle and Agrify announce merger

EditorIsmeta Mujdragic
Published 05/16/2024, 09:46 AM

ONTARIO, Calif. - Nature's Miracle Holding Inc. (NASDAQ: NMHI), a company specializing in vertical farming technology, has agreed to merge with Agrify Corporation (NASDAQ: AGFY), a provider of cultivation and extraction solutions for the cannabis industry. Upon completion, Agrify will become a wholly-owned subsidiary of Nature's Miracle.

The definitive agreement, announced today, follows a previously disclosed term sheet. Agrify shareholders will receive 0.45 shares of Nature's Miracle common stock for each Agrify share held, resulting in approximately 30% ownership of the post-merger company by Agrify shareholders. Nature's Miracle has also committed to purchasing and guaranteeing certain Agrify notes with a mix of cash and stock.

The merger aims to combine the management expertise of both companies to capitalize on the growing vertical farming and cannabis extraction sectors. The combined entity plans to leverage core business segments, such as LED lighting, grow feed, and indoor farming control systems, to enhance market share and operational efficiency.

James Li, CEO of Nature's Miracle, expressed confidence in the merger's potential to drive market growth and create value for stakeholders. Raymond Chang, CEO and Chairman of Agrify, emphasized the need for consolidation in the cannabis industry and the opportunity for growth through the combined company's technology and services.

The transaction is anticipated to close in the second half of 2024, subject to shareholder approval and customary closing conditions. The merged company intends to focus on expanding its manufacturing presence in the U.S. and sourcing products from Asia.

Nature's Miracle, led by James Li and President Jonathan Zhang, offers a range of products for controlled environment agriculture, including horticultural lighting and irrigation systems. Agrify's Vertical Farming Units and extraction technologies are designed to enhance product consistency and return on investment for cultivators.

The information in this article is based on a press release.

InvestingPro Insights

Nature's Miracle Holding Inc. (NASDAQ: NMHI), in its recent merger agreement with Agrify Corporation, is navigating through challenging financial waters. As per the latest real-time data from InvestingPro, Nature's Miracle is grappling with significant revenue decline, with a stark -52.03% revenue drop in the last twelve months as of Q4 2023. This is further reflected in the quarterly revenue growth, which also saw a decrease of -51.55% in Q4 2023. The company's gross profit margin stands at a negative -10.62%, underscoring the financial stress Nature's Miracle is enduring.

InvestingPro Tips suggest that NMHI's stock is currently in oversold territory, potentially indicating a buying opportunity for investors who believe in the company's long-term prospects post-merger. Additionally, the stock is trading at a low earnings multiple, which might appeal to value investors looking for underpriced stocks. It's noteworthy that Nature's Miracle has liquid assets that exceed its short-term obligations, providing some financial cushion amidst the revenue and profit challenges.

For investors interested in a deeper dive into Nature's Miracle's financial health and future prospects, more InvestingPro Tips are available. With the merger set to close in the second half of 2024, these insights could prove valuable. To explore further, visit https://www.investing.com/pro/NMHI and don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 11 additional InvestingPro Tips listed for Nature's Miracle, which could provide a comprehensive understanding of the company's financial position and stock behavior.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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