Hydroponics Producer Hydrofarm Prices $269M Offering Lead By JPMorgan, Stifel

The ancillary cannabis company Hydrofarm Holdings Group, Inc. HYFM, announced Wednesday that it priced an underwritten public offering of 4.81 million of its shares at a price of $59 per share to collect roughly $269.3 million.

The lead book-running managers for the offering are J.P. Morgan and Stifel, while Deutsche Bank Securities, Truist Securities and William Blair were chosen as book-running managers.

The hydroponics equipment producer has provided the underwriters with a 30-day option to buy an extra 720,894 shares at the public offering price, minus the discounts and commissions.

The Fairless Hills, Pennsylvania-based company projects that the offering will end on May 3, upon the completion of standard closing requirements.

Hydrofarm's Recent Activities

Just two days prior to the offering, Hydrofarm confirmed that it entered into an agreement to buy the plant nutrients producerField 16, LLC., for around $78.1 million in cash and credit and $15 million in stock. Field 16 is known for its line of nutrients known as HEAVY 16.

“As a leading hydroponics company, a key component of our growth strategy is to bring dynamic brands like HEAVY 16 under the Hydrofarm umbrella and continue to solidify our position as the acquirer of choice in this highly fragmented and fast-growing industry,” said Bill Toler, Hydrofarm's chairman and CEO. “Controlled environment agriculture is in the midst of a revolution and poised to be the most significant new market category to emerge in a generation.”

This is the company’s first purchase since its IPO in December 2020. The transaction is expected to be finalized in May.

Price Action

Hydrofarm shares gained 0.23% Friday, closing at $65.70. 

Photo by Ryan Lange on Unsplash.