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March 26, 2021updated 06 May 2021 7:26am

SPAC vehicle to take vertical farmer AeroFarms public

US vertical-farming business AeroFarms is to list on the stock market through the food industry's latest deal involving a special purpose acquisitions company, or SPAC.

By Simon Harvey

US vertical-farming business AeroFarms is to list on the stock market through the food industry’s latest deal involving a special purpose acquisitions company, or SPAC.

AeroFarms, located in Newark, New Jersey, produces leafy greens and herbs under its Dream Greens brand, which are supplied into bricks-and-mortar US retailers Whole Foods Market and Shoprite, as well as being available online at Amazon Fresh and FreshDirect. It operates nine farms around the Newark area.

It has struck a deal with Spring Valley Acquisition Corp., a SPAC listed on the Nasdaq exchange.

The transaction amounts to US$1.2bn based on “a fully diluted pro-forma equity value … assuming no redemptions by Spring Valley shareholders”, a statement issued today (26 March) read. The new listed company will be led by AeroFarms’ CEO David Rosenberg, who founded the vertical farmer in 2004 with Edward Harwood.

Rosenberg said: “Our business is at an inflection point where we will scale-up our proven operational framework and begin our expansion plans in earnest. With the support of Spring Valley, we not only have the capital in place to execute our plan, but also a sponsor who shares the same ESG philosophies to make a positive impact on the world, while serving the interests of our shareholders.”

AeroFarms added the transaction will provide the company with around $317m in "unrestricted cash at close to fund future farm development and general corporate purposes". The boards of directors at both companies have approved the deal but it is still subject to the approval of Spring Valley shareholders.

Once completed, two of Spring Valley's directors – Deboara Frodl and Patrick Wood – will join the AeroFarms' board, while the remainder are expected to resign and be replaced with the vertical-farming firm's own nominees.

Chris Sorrells, the CEO of Spring Valley, added: "Our goal was to partner with an industry-leading, best-in-class, sustainability-focused company and we are ecstatic to combine forces with AeroFarms, the market leader in vertical farming, to accomplish this vision. 

"AeroFarms has a technological edge on the industry, developing a world-class innovation team that has fuelled a robust and growing intellectual property portfolio of patents and trade secrets." 

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