Local Bounti Corporation announced that it has entered into a definitive agreement to acquire California-based complementary indoor farming company Hollandia Produce Group which operates under the name Pete's, for total consideration of $122.5 million, subject to customary adjustments. The transaction consideration will be comprised of $92.5 million in cash, expected to be provided pursuant to Local Bounti's existing lending facility with Cargill, and the remaining $30.0 million of consideration payable in shares of Local Bounti common stock.
Pete's is a California-based indoor farming company with three greenhouse growing facilities, including two operating facilities in California and one under construction in Georgia which is scheduled to begin operations in the second quarter of 2022. Pete's has distribution to approximately 10,000 retail locations across 35 U.S. states and Canadian provinces. Pete's primary products include living butter lettuce as well as packaged salad and cress.
Local Bounti plans to install its Stack & Flow Technology at Pete's three facilities, combining the best aspects of vertical farming and greenhouse growing technologies to deliver higher yields of diverse leafy greens at superior unit economics.
"This synergistic acquisition is a unique opportunity to combine a highly-complementary and profitable CEA market leader in Pete's with Local Bounti's technological solutions to significantly accelerate market access for our superior produce varieties and create one of the largest CEA companies in the United States," said Craig Hurlbert, Co-CEO of Local Bounti.
"Our best-in-class unit economics at Local Bounti are enabled by our efficient and cost-effective system. The acquisition of Pete's allows us to de-risk our operational execution in the near-term with their proven model while offering significant synergies to ramp their production with a retrofit of our Stack & Flow Technology."
"For 50 years we have been obsessed with offering high quality products and great service while focusing on innovation and sustainability within the indoor farming space. By combining with Local Bounti, we scale our business and partner with a leader that shares in our philosophy," said Brian Cook, CEO of Pete's.
For more information:
Pete's Living Greens
www.eatpetes.com
Local Bounti
www.localbounti.com