Jan 25, 2023Ag tech company to acquire berry grower
AgriForce Growing Systems Ltd. has entered into a binding letter of intent (LOI) to acquire Berry People LLC.
Based in Hollister, California, Berry People is a year-round grower and shipper of organic and conventional strawberries, blueberries, blackberries and raspberries.
AgriForce is an intellectual property (IP)-focused ag technology company dedicated to advancing sustainable cultivation practices and food and plant products.
The acquisition bolsters the AgriForce Brands division and allows the company to realize commercial efficiencies with UN(THINK), a program which aims at innovating in the specialty flour and grain-based products categories, according to a news release.
Berry People was founded in 2017 by berry industry veterans to create a new platform to meet market demand for a branded, year-round and full-line supply of organic and conventional berries. Berry People quickly established a recognized global trade brand and scalable operations, comprised of more than 200 retail and foodservice clients and more than 100 grower and exporter clients across the U.S., Canada, Mexico and Peru. For the year ending Dec. 31, Berry People saw unaudited net revenues of $37 million, according to the release.
The LOI, which is to be followed by a definitive purchase agreement, sets forth a $28 million purchase price, consisting of $18.2 million in cash and $9.8 million in AgriForce restricted shares. It is to be paid at closing to acquire 70% of Berry People’s equity interests. Berry People will have the opportunity for future earnouts during the five years after closing based on future revenue and EBITDA targets associated with agreed upon growth targets, according to the release.
In collaboration with AgriForce, Berry People plans to further develop backward integration into agricultural production via farming joint ventures and deploy licensed and developed IP as part of a scalable franchising model, according to the release.
“We are thrilled to join AgriForce, as we are mutually aligned on the company’s vision and strategy, as well as AgriForce’s desire to build the Berry People brand alongside the company’s founders and industry-experienced management team,” Jerald Downs, Berry People’s CEO, said in the release. “This assures us that we can be a reliable and rooted platform for our industry partners, other collaborators, and the broader communities that we serve.”
The U.S. berries market was valued at $9.6 billion in 2021, with 10% annual growth rates each year since 2019, a trend expected to continue, according to the release.
“Berry People is a thriving business with promising growth opportunities,” Mauro Pennella, AgriForce Brands’ president, said in the release. “We anticipate that the additional volume coming in the next year from their new grower relationships in Mexico should drive robust growth in 2023.
“We aim to maximize commercial synergies between Berry People and UN(THINK), in terms of distribution, to retail, foodservice and other areas. Furthermore, we see a great fit with Delphy, given their well-established soft fruit and CEA advisory business, as well as their advanced R&D capabilities, which will work with Berry People and its grower-operators to drive increased yields and improved quality, enhance farm operations, and support the deployment of new varietals, fortifying Berry People’s vertical integration and growth plans.”
AgriForce focuses on building an integrated ag tech platform that combines the technology, intellectual property and knowledge to provide global solutions to help drive sustainable crops and nutritious food, according to the release.