Leading indoor farming company AeroFarms has decided its merger agreement with Spring Valley Acquisition Corp. is not in the best interests of shareholders, pulling the plug on a deal announced seven months earlier.
Both companies have mutually agreed to terminate their previously announced agreement and plan of merger, effective immediately, AeroFarms said in a statement on Oct. 14.
“We made this decision to ensure that AeroFarms is in an optimal position to pursue our growth strategy and to deliver on our mission to grow the best plants possible for the betterment of humanity. We believe proceeding with this transaction is not in the best interests of our shareholders,” said David Rosenberg, co-founder and CEO of AeroFarms, which has its global headquarters in Newark, N.J. “We have a great working relationship with Spring Valley and wish them well in pursuing their business.”
Spring Valley went public in the fall of 2020 as a so-called blank check company and raised $230 million to pursue acquisitions and investments in sustainable businesses. In March 2021, it announced plans to acquire AeroFarms. The deal would have given the 15-year-old indoor farming company an expedient way to access the public equity market without the time and expense associated with the traditional initial public offering process.
When the deal was announced, Rosenburg described Aerofarm’s business as being at an inflection point where it would scale up its proven operational framework and begin expansion plans in earnest.
“With the support of Spring Valley, we not only have the capital in place to execute our plan, but also a sponsor who shares the same ESG philosophies to make a positive impact on the world, while serving the interests of our shareholders,” Rosenburg said at the time.
However, there were signs the deal was in trouble when on Aug. 20, Spring Valley postponed a shareholders’ meeting to approve proposals contained in the company’s proxy statement related to a deal that Spring Valley stockholders had previously approved. The postponement was intended to allow more time to satisfy undisclosed closing conditions.
Although AeroFarms' deal with Spring Valleyis not moving forward, CEO Rosenberg maintains the company has tremendous momentum with strong retail distribution gains of its AeroFarms branded products.
“We are looking forward to the additional scale and capacity from our Danville, Virginia farm, which is on-track for commercial production in mid-2022,” Rosenberg said.