September 29, 2020

By Lynda Kiernan, Global AgInvesting Media

As AppHarvest launches the world’s largest indoor farm in Morehead, Kentucky, the high-tech, climate-controlled greenhouse developer has made a major announcement.

AppHarvest has entered into a definitive merger agreement with Novus Capital Corporation, a publicly-traded special purpose acquisition company, which will result in AppHarvest going public at a valuation of $1 billion.

AppHarvest believes that there already exists the technology needed to significantly increase food production. The company’s indoor farm greatly reduces the acreage needed, uses no pesticides, eases the burden of long-distance shipping and fuel usage, and is the first facility of its scale to rely solely on recycled rainwater to meet its water needs. Through the integration of this closed-loop water system, agricultural production can occur without the runoff issues often encountered with traditional agricultural production.

The company has also built strong relationships with top agricultural and construction companies and universities in the Netherlands – the world’s leader in advanced-tech, controlled environment agriculture (CEA). The Netherlands, which is similar in scale to Eastern Kentucky, is the second-largest agricultural exporter behind the U.S. due to its expansive network of CEA facilities, and these tie-ins allow AppHarvest to gain access to the most cutting-edge technologies for sustainably increased crop yields and improved access to nutritious, non-GMO foods. 

From its location in Central Appalachia, AppHarvest’s 60-acre CEA facility (one of the largest in the world) is within less than a day’s drive to 70 percent of the entire U.S. population – lowering diesel fuel costs by 80 percent, and giving its non-GMO, chemical-free fruits and vegetables a competitive advantage against low-cost foreign imports.

This merger with Novus Capital will advance AppHarvest’s mission to reinvent agriculture in the U.S., and to build out an agtech hub in Appalachia through the development of several large-scale controlled environment facilities.

The business combination will value AppHarvest at $1 billion, and will provide $475 million to the company including $375 million fully committed common stock PIPE at $10 per share anchored by existing and new investors including Fidelity Management & Research Company, Inclusive Capital, and Novus Capital Corporation. 

“Our investment platform is about leveraging capitalism and governance in pursuit of a healthy planet and the health of its inhabitants — and AppHarvest is perfectly aligned with this mission,” said Jeffrey Ubben, founder and managing partner, Inclusive Capital Partners, and board member, AppHarvest.

Assuming minimal redemptions, upon closing of the deal, the combined company will be known as AppHarvest, and will be led by Johnathan Webb, AppHarvest’s founder and CEO. The company will also be made available of $435 million of unrestricted cash to fund operations, and to build additional high-tech CEA farms, and other general purposes.

“We are excited to transition AppHarvest to a public company and raise nearly a half a billion dollars in the process,” said Jonathan Webb, founder & CEO, AppHarvest. “This will allow us to pursue our mission of transforming agriculture. A mission that’s become even more important since the global pandemic exposed how a rapidly increasing reliance on imports jeopardizes food security.”

Webb continued, “We now know that, to build a more resilient food system that meets our growing population demands, we must immediately start building controlled environment agriculture facilities, as these farms use far fewer resources to grow far more produce. We believe that this partnership with Novus Capital is a transformative transaction which will allow us to both rapidly scale our agriculture facilities, in pursuit of our goal to redefine American agriculture, and build the country’s AgTech capital within Appalachia. Together we can transform agriculture.”

At the same time, AppHarvest has announced that Peter C. Halt – a finance veteran with several years experience, most recently as CFO of TiVo Corporation – has joined its executive team as chief financial officer.

“Jonathan Webb is exceptional at getting big complex projects done fast and with the highest precision,” said David Chen, CEO of Equilibrium Capital and AppHarvest board member.

“He is the right leader for AppHarvest’s disruptive mission. Furthermore, with his leadership AppHarvest has drawn together some of the most talented individuals in the AgTech industry to drive the needed scale. I am extremely excited to see the fruits (or vegetables as the case may be!) of this team’s labors, as they execute on their plans to change food production in the United States.”

Less than two months ago, AppHarvest closed on a $28 million Series B, and also announced numerous high-profile additions to its board, including icon and entrepreneur Martha Stewart; CEO of Impossible Foods, David Lee; investor and best-selling author J.D. Vance; and Anna Mason, partner at Rise of the Rest Seed Fund led by AOL co-founder, Steve Case. 

“All Americans should believe in the AppHarvest mission to develop large-scale sustainable food production in the heart of Central Appalachia,” said Martha Stewart, founder of Martha Stewart Living Omnimedia and AppHarvest board member. “Jonathan and his exceptional team are disrupting the food production ecosystem in the best way — to provide better, healthier food in a more sustainable manner.”

Fellow board member J.D. Vance with Narya Capital added, “AppHarvest is developing a world-class food production ecosystem to benefit a majority of consumers in the United States, right here from Central Appalachia. This region offers tremendous resources in terms of location, and in terms of the skilled hardworking people of the region who make this incredible mission possible.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.