September 7, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

Montana-based indoor ag company Local Bounti has closed on a previously announced $200 million debt financing facility with Cargill, which is also a recent investor in the company, according to a press release. 

Playing the roles of both an investor and a lender to the company demonstrates a high level of support for Local Bounti, which recently engaged in a SPAC merger with Leo Holdings III Corp valuing the company at $1.1 billion upon its listing on the New York Stock Exchange under the symbol LOCL. Cargill invested $125 million in the company upon its IPO, and committed a further $200 million in debt. 

Launched in Hamilton, Montana, in 2018 by former energy industry executives Travis Joyner and Craig Hurlburt, Local Bounti will construct the first IPO-funded greenhouses west of the Mississippi River in the U.S.

“In all four corners of our business, we strive to secure the best partners to help ensure our success,” said Joyner, co-founder and co-CEO, Local Bounti. “Cargill, as a global leader in the agricultural sector, is a great example of this.”

Local Bounti estimates that the U.S. market for herbs and vegetables will reach a value of $30 billion by 2025, with less than 1 percent of that produce currently being produced through indoor systems. 

As a leader in controlled environment agriculture (CEA), Local Bounti produces field-grown greens delivering superior taste and quality through its innovative proprietary modular and scalable system that incorporates environmental, social, and governance (ESG) standards and USDA Harmonized Good Agricultural Practices (GAP Plus+).

“Local Bounti and Cargill share a commitment to delivering farm to fork options for consumers while sustaining the land, not only for today but for generations of farmers to come,” said Ross Jennings, head of Cargill’s trade and capital markets business. “As we look to advance sustainable agriculture practices, it was a natural and exciting fit to finance the construction of Local Bounti’s innovative and sustainable greenhouses.”

With the proceeds from this SPAC merger and IPO the company is undertaking an expansion to create a production network to serve a western U.S. market that it estimates is valued at $10.6 billion.

Called Project Sunshine, the project will include 32 greenhouses on 28 acres which Local Bounti acquired in June for $3.1 million in Pasco, Washington. The Pasco facility will serve customers in Washington and Oregon, initially producing seven different leafy greens, before expanding its product line to as many as 40 different products including basil, cilantro, and green leaf, red leaf, butter, and romaine lettuce varieties. In addition to being an investor and lender to the company, Cargill has expressed a possible intention of also funding the construction of all of Local Bounti’s future facilities in the U.S. through 2025. 

“Cargill’s financial support will help us fast-track the build out of strategically located facilities that showcase our patent pending Stack & Flow Technology, which produces superior unit economics with high yield and low-cost operations,” said Hurlbert.

“As we pioneer a new chapter in sustainable agriculture, we are challenging the way food is produced and delivered. The consumer benefits by enjoying delicious, locally grown, longer-lasting fresh produce, and the planet benefits because we use 90 percent less land and water, and no herbicides or pesticides. It’s time to turn a new leaf!”

The expansion is scheduled to be completed and be in operation by the fourth quarter of this year, to be followed by groundbreaking for additional facilities before the end of 2021, culminating with seven additional facilities being built in the U.S. West by the end of 2025. 

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.