The acquisition will be completed through a reverse triangular merger of HydroGreen and CubicFeed Systems US Corp. The merger will result in HydroGreen becoming a subsidiary of CubicFarm Systems Corp.
CubicFarm Systems Corp., a Canadian agriculture technology (agtech) and vertical farming technology company, has announced the strategic acquisition of HydroGreen Inc., a US-based manufacturer of fully-automated hydroponic growing systems. Subject to customary closing conditions including approval from HydroGreen shareholders and the TSX Venture Exchange, the acquisition is anticipated to close in December 2019. It will be completed through a reverse triangular merger of HydroGreen and CubicFarm’s subsidiary CubicFeed Systems US Corp. Following the merger, HydroGreen will become a wholly-owned and indirect subsidiary of CubicFarm. Moving forward, this new subsidiary will operate HydroGreen’s existing business.
“I’m incredibly proud of our company’s growth trajectory since HydroGreen’s first system prototype was built in South Dakota’s Sioux Falls in 2014, then refined progressively to attain today’s reliability rating of 98% and the ability of the system to monitor and correct issues in advance,” said CEO of HydroGreen, Dihl Grohs.
“The technology is poised for large-scale commercialization, and the merger represents an ideal next step for bringing HydroGreen systems to international markets. I’m confident the global leadership of CubicFarm in automated vertical farming solutions, in combination with Artex Feed’s go-to-market ability, will be resulting in substantial uptake of our systems as farmers learn how the technology improves the productivity of their operations,” added Grohs.
Acquisition positions CubicFarm to be a leading agtech company
“The landmark HydroGreen transaction is a catalyst for continued growth at our company. Already having established a robust sales pipeline for CubicFarm’s fresh produce vertical, the acquisition will be enabling our company to capitalize on automation and technology synergies with HydroGreen for capturing the animal feed space, which our company believes could be a bigger market than fresh produce. About two-thirds of the agricultural land of the world is used for animal feed production and grazing. The ‘Land on a Stand’ system of HydroGreen helps to reduce the tremendous amounts of land needed to grow feed,” said CEO of CubicFarm Systems Corp., Dave Dinesen.
According to Dinesen, the acquisition of HydroGreen positions CubicFarm to be a leading agtech company that provides controlled-environment growing systems in four diversified verticals, viz. nutraceutical ingredients, hemp/cannabis, animal feed, and fresh produce.