GrowGeneration Stock Plunges As HGS Acquisition Falls Through; Cuts FY21 Outlook

GrowGeneration Corp GRWG has terminated the previously announced asset purchase agreement with HGS Hydro mutually.
"This was a difficult decision regarding the HGS Hydro acquisition, but following appropriate due diligence and capital allocation analysis, we decided to mutually terminate the acquisition," said Darren Lampert, GrowGeneration's CEO.
Outlook: GrowGeneration expects Q3 revenue of $114 million - $116 million versus the consensus of $123.06 million. It estimates Q4 revenue of $110 million - $120 million versus the consensus of $132.66 million.
GrowGeneration lowered its FY21 revenue outlook to $440 million - $452 million (prior view $455 million - $475 million) versus the consensus of $471.64 million. The company had expected the HGS Hydro acquisition to provide about $20 million of revenue for 2021.
GrowGeneration also announced its acquisition of All Seasons Gardening, an indoor-outdoor garden supply center specializing in hydroponics systems, lighting, and nutrients. The financial terms of the deal were not disclosed.
GrowGeneration held $124.5 million in cash and equivalents as of June 30, 2021.
Price Action: GRWG shares are trading lower by 9.81% at $21.42 on the last check Wednesday.

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