Leafy Greens AeroFarms Goes Public via SPAC
Posted on 03/26/2021
Founded in 2004, AeroFarms, Inc. is a certified B Corporation engaged in vertical farming. AeroFarms is headquartered in Newark, New Jersey. AeroFarms announced it has entered into an Agreement and Plan of Merger with Spring Valley Acquisition Corp. (Nasdaq: SV) (“Spring Valley”), a special purpose acquisition company. Upon closing of the transaction, AeroFarms will become publicly traded on Nasdaq under the new ticker symbol “ARFM”. The combined company will be led by David Rosenberg, Co-founder and Chief Executive Officer of AeroFarms. Spring Valley’s sponsor is supported by Pearl Energy Investment Management, LLC, a Dallas, Texas based investment firm that focuses on partnering with management teams to invest in the North American energy industry.
AeroFarms sells leafy greens products under its Dream Greens brand, which is consistently celebrated by top chefs and tastemakers. Dream Greens brand is available in the northeast US, including at Whole Foods Market, ShopRite, Amazon Fresh, and FreshDirect. Dream Holdings, Inc. is the holding company of AeroFarms.
AeroFarms projects US$ 4 million in revenue for 2021 and US$ 13 million in revenue for 2022.
Under the terms of the Merger Agreement, the transaction is valued at a fully diluted pro forma equity value of approximately US$ 1.2 billion assuming no redemptions by Spring Valley shareholders. The PIPE offering was anchored by institutional investors, AeroFarms insiders and Pearl Energy Investments, the sponsor of Spring Valley. The transaction will provide approximately US$ 317 million of unrestricted cash at close to fund future farm development and general corporate purposes.
Sources of Funding
Spring Valley Acquisition Corp. Equity – US$ 232 million
Convertible Note – US$ 30 million
AeroFarms Equity Rollover – US$ 1,000 million
PIPE Financing – US$ 250 million
J.P. Morgan Securities LLC is acting as exclusive financial advisor to AeroFarms. Cowen is acting as a financial advisor to Spring Valley. Cowen and Wells Fargo Securities are acting as capital markets advisors to Spring Valley. J.P. Morgan Securities LLC, Cowen and Wells Fargo Securities acted as placement agents to Spring Valley in connection with the PIPE offering.
DLA Piper LLP (US) is acting as legal counsel to AeroFarms, Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to the placement agents and Kirkland & Ellis LLP is acting as legal counsel to Spring Valley.
On December 31, 2020, Citadel Advisors LLC filed a reported ownership of 1,346,506 shares, or 5.9% of the SPAC.
In July 2019, AeroFarms raised US$ 100 million in late-stage funding. The lead investor was INGKA Group, the parent company of furniture maker IKEA, an existing investor in the company. Other venture investors in AeroFarms include ADM Capital and the Wheatsheaf Group, as well as Mission Point Capital, China’s GSR Ventures, AllianceBernstein, and SoftBank Group Corporation. AeroFarms has been around longer than Plenty.