Nature’s Miracle and Agrify Terminate Merger Agreement Amid Challenges

Nature’s Miracle Holding Inc. (NASDAQ: NMHI) and Agrify Corporation announced on Monday the mutual termination of their previously announced merger plan, citing unfavorable market conditions. The all-stock deal, which valued Agrify at approximately $6.4 million, would have seen Ontario-based Nature’s Miracle acquire its smaller rival.

The companies confirmed that the decision to terminate the agreement will not result in any cancellation fees for either party. This decision, according to Nature’s Miracle Chairman and CEO James Li, aligns with the best interests of shareholders and preserves the long-term value of the business amidst the current market environment.

“At Nature’s Miracle, we will continue to focus on our core indoor growing products including grow light, dehumidifier, and container growing systems where we are seeing strong momentum,” Li stated. The termination agreements cover both the merger deal and the purchase of outstanding debt.

The merger, which was solidified just a week ago, aimed to unite the companies’ complementary offerings in controlled-environment agriculture. Nature’s Miracle specializes in horticultural lighting and irrigation systems, while Agrify manufactures vertical farming units and extraction equipment for the cannabis industry. The combination was seen as a strategic move to bolster both companies’ positions in the indoor agriculture sector.

For Agrify, which ended 2023 with an accumulated deficit of around $265.8 million, the merger appeared to be a potential lifeline. Agrify shareholders would have owned about 30% of the combined entity. Despite the setback, Agrify’s CEO Raymond Chang expressed optimism about the company’s future.

“Agrify continues to see strong momentum and pipeline growth quarter over quarter in both cultivation and extraction business divisions,” Chang said. “We believe that it is in Agrify’s best interest to stay the course and continue to execute. Agrify’s management team and board are committed to continuing to explore all strategic options in order to create the highest shareholder value.”

Both companies acknowledged the cooperation that led to the mutual decision to terminate the merger and emphasized their commitment to their respective growth strategies moving forward.

Source: Finance Yahoo