February 7, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Florida-based vertical farming company Kalera has merged with Agrico Acquisition Corp. to debut on Nasdaq at a valuation of $375 million. Once this deal is closed, Kalera will delist from the Euronext Growth Oslo exchange during Q2 2022.

Kalera, formerly known as Eco Convergence Group, took on its name when it rebranded and broke ground on what would be the largest indoor vertical farming operation in the U.S. Southeast in 2019. 

Founded in 2010, the company opened the first of many planned hydroponic HyCube growing centers in 2018, with the completion of a facility located at the Orlando World Center Marriott grounds. Located adjacent to the Marriott’s main kitchen, Kalera began supplying greens for the hotel’s multiple restaurants – something that reduced the resort’s carbon footprint by eliminating the need to ship in produce. Today, the company operates vertical farms in Orlando, Florida; Atlanta, Georgia; Houston, Texas; and Kuwait.

Science and technology are key to Kalera’s success. Years of plant and data science have enabled the company to harness IoT and data analytics to form an AI-driven growing process that maximizes nutrient mixes, light recipes, and environmental controls to give their plants exactly what they need to thrive.

Using only non-GMO seeds, each plant is grown with filtered water and air in precisely controlled hydroponic facilities. Temperature and humidity are exactly monitored, and pesticides, insecticides, and hormones are never used, resulting in consistent, high-quality crops year-round.

Furthermore, by using a closed loop irrigation system, Kalera’s crops are grown using 95 percent less water than traditional farming; and by using cleanroom technology, there are no chemicals or pathogens present.

“Kalera is already positioned as a leader in the vertical farming industry with its 10 facilities operating, or with construction nearly complete, and Vindara, its seed business dedicated to controlled environments,” said Brent De Jong, chairman and CEO, Agrico.

Speciality indoor vertical farming seed developer Vindara was acquired by Kalara in February 2021 – a deal commented on by Adam Bergman in his article The Rise of Vertical Farming, published by GAI News in March 2021, where he noted:

“The role of seed genetics in vertical farming has come to the forefront during the past year due to the creation of Unfold, a vegetable seed company created from Bayer’s vegetable seed germplasm business and capital provided by Leaps by Bayer and Temasek. Additionally, the acquisition of Vindara, which claims to be the first company to develop seeds specifically designed for use in vertical indoor farm environments, by Kalera, a vertical farming company, is another sign of the growing importance of seed genetics for the vertical farming sector.”

De Jong added, “The proposed merger with Agrico positions Kalera to be the first leafy green vertical farm company to have a national footprint in the US and be able to reliably supply a national off-take contract while still being local. The Agrico team and its scaling experience will supplement an already strong Kalera management team and Board of Directors.”

If no public shareholders of Agrico exercise their right to redemption, existing Kalera shareholders will end up holding approximately 52 percent of the resulting combined company, while Agrico shareholders will own approximately 42 percent.

Once the merger is complete, Kalera’s recently appointed interim CEO Curtis McWilliams and its current management team will continue to oversee the company’s business operations, including spearheading Kalera’s strategic global expansion of its farms. (Currently, six of its 10 sites  are under construction.)

Kalera has already taken huge steps in this direction when it recently agreed to acquire &ever GmbH, a leading German indoor grower of baby leaf greens with operations in the Middle East, Asia, and Europe, through a deal valued at EUR 130 million (US$149 million).

“From the beginning, our vision has been to offer communities worldwide hyperlocal high-quality salads and herbs year-round,” said Dr. Henner Schwarz, CEO, &ever and managing director, EMEA and Asia for the combined business, in August 2021. “Together with Kalera, we have now come a big step closer to this goal.”

With the completion of this deal, Kalera became the only company in the leafy green segment to be able to serve all segments within the industry – from baby leaf to cut leaf, teen leaf, and full head products, positioning it as the natural leader within the indoor farming market.

Of course, when thinking of CEA and SPAC deals, it’s hard not to bring AppHarvest to mind. In September 2020, just as the company was launching the world’s largest indoor farm in Morehead, Kentucky, it made the announcement that it was going public through a SPAC merger with Novus Capital Corporation.

At the time, the business combination valued AppHarvest at $1 billion, and provided $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.

Since that time, AppHarvest was hit with a maelstrom of challenges and setbacks, from distribution disruptions, to supply chain issues, and the lowest tomato prices in the last 10 years, among others. However, the company forges on. In addition to its Morehead facility, which has the capacity to produce 40 million pounds of tomatoes per year, AppHarvest has three new farms under construction in Kentucky – in Berea, Richmond, and Somerset – on pace to be completed by the end of this year.

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– 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.