UPLAND, Calif. - Nature's Miracle Holding Inc. (NASDAQ: NMHI), a company specializing in vertical farming technology, announced today it has signed a term sheet for the acquisition of Agrify Corporation (NASDAQ: AGFY), a provider of cultivation and extraction solutions. The transaction is expected to close within the next six months, pending due diligence, shareholder approval, and customary closing conditions.
The deal will see Agrify shareholders receive approximately 0.45 of a Nature's Miracle share for each Agrify share they hold, subject to adjustments. This exchange ratio values Agrify's equity at approximately $6.35 million, or $0.4185 per share, based on the closing price of Nature's Miracle's stock as of April 16, 2024.
Upon the merger's completion, Raymond Chang, CEO and Chairman of Agrify, will become President of the Agrify division within Nature's Miracle and join its board. Nature's Miracle anticipates that the integration of Agrify's software and AI technology will enhance its vertical farming business and drive revenue growth, particularly in the cannabis extraction sector.
In preparation for the merger, Nature's Miracle has agreed to purchase $750,000 worth of horticultural LED lighting from Agrify and will also acquire the outstanding indebtedness of Agrify held by entities controlled by Chang, using a combination of cash and stock.
James Li, CEO of Nature's Miracle, expressed enthusiasm for the synergies expected from the acquisition, highlighting the potential efficiencies and revenue growth from combining their respective technologies.
This strategic move is based on a press release statement and is intended to position Nature's Miracle as a leader in the vertical farming and controlled environment agriculture industry.
InvestingPro Insights
Nature's Miracle Holding Inc. (NASDAQ: NMHI) has been navigating challenging market conditions, as reflected in the real-time data from InvestingPro. With a significant year-to-date price total return of -91.34%, the company's stock has been under considerable pressure. This trend aligns with the InvestingPro Tip indicating that the price has fallen significantly over the last year, which could potentially offer a lower entry point for investors believing in the company's long-term prospects.
From a financial standpoint, Nature's Miracle's gross profit margin stands at 13.46% for the last twelve months as of Q3 2023, which underscores the concern noted by one of the InvestingPro Tips regarding the company's weak gross profit margins. As the company moves forward with its acquisition of Agrify, these margins will be a key figure to watch, especially considering the expected synergies and efficiency improvements.
Despite the current volatility, Nature's Miracle trades at a low earnings multiple, with a P/E Ratio (Adjusted) of -9.16 for the last twelve months as of Q3 2023. This metric, coupled with the company's liquid assets exceeding short-term obligations, could suggest a level of financial resilience that may support the company through its acquisition and integration of Agrify.
For investors looking for a deeper dive into Nature's Miracle Holding Inc., InvestingPro provides additional insights and metrics. There are currently 9 more InvestingPro Tips available that could help investors make more informed decisions. To explore these tips and gain a comprehensive understanding of NMHI's financial health and stock performance, visit InvestingPro and remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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