CubicFarm Systems Corp. announced that it has entered into a binding purchase agreement effective December 10, 2019 to acquire HydroGreen, Inc., an arm’s-length private company headquartered in South Dakota.
HydroGreen is a manufacturer of fully-automated hydroponic growing systems that produce live, green animal feed, prioritizing animal health and performance. HydroGreen’s process sprouts grains, such as barley and wheat, in a controlled environment with minimal use of land, labour and water. Its system performs all growing functions including seeding, watering, lighting, harvesting, and re-seeding – all with the push of a button – to deliver animal feed without the typical investment in fertilizer, chemicals, fuel, field equipment and transportation.
Overview of acquisition
The Acquisition will be completed by way of a reverse triangular merger of CubicFeed Systems U.S. Corp., a wholly owned subsidiary of the Company, and HydroGreen, resulting in HydroGreen being renamed “of CubicFeed Systems U.S. Corp” and becoming an indirect and wholly-owned subsidiary of the Company. The new CubicFarms subsidiary will operate the existing business of HydroGreen moving forward.
In 2018, HydroGreen recorded unaudited sales revenues of approximately US$1.2 million and an unaudited gross profit of approximately US$700,000.
The Acquisition is expected to close in December 2019 following the HydroGreen Meeting.