AgriFORCE to amend merger agreement with Delphy

AgriFORCE Growing Systems Ltd AGRI, an intellectual property IP-focused AgTech company, agreed to amend the merger agreement with Delphy Groep BV, a Netherlands-based AgTech consultancy firm.

In February, AGRI entered into a definitive agreement to acquire Delphy for $29 million through a combination of cash and stock. This definitive agreement follows the binding LOI as previously announced in October 2021.

The parties agreed to extend the closing date to allow enough time to complete Form 14A for shareholder approval.

The transaction is likely to complete in the current calendar year, subject to shareholder approval by AgriFORCE.

The amendment will reduce the total purchase price from $29 million to $17.66 million, and create a potential earnout of up to $5.99 million over two years, based on future performance milestones.

The audit took longer than expected due to the size of the planned transaction, and the necessary adjustments to convert from Dutch GAAP to US GAAP where certain Government contract work is classified differently, and Delphy is now looking to close the acquisition before the end of the year, according to AgriFORCE CEO Ingo Mueller. The reduction in upfront purchase price and the addition of earnout reflect confidence in the outlook and further alignment of interests.

The reduction in the planned purchase price and the addition of an earnout component reflects the alignment of our interests and mutual confidence in the outlook for the business. We believe that this accretive acquisition will help our business and catapult AgriFORCE onto the global stage. Mueller said that we believe that this accretive acquisition will help to transform our business and catapult AgriFORCE onto the global stage.

Price Action: AGRI shares fell by 1.35% to $1.46 on Friday.