Hydrofarm Holdings Acquires Aurora's Innovation And Cannabis Nutrients And Grow Operations In $161M Deal

Hydroponics equipment manufacturer Hydrofarm Holdings Group, Inc. HYFM announced Thursday that it’s acquiring Aurora Innovations, Inc., Aurora International, Inc., and Gotham Properties LLC for $161 million.

The acquisition came on the heels of pricing of an underwritten public offering of 4.81 million of the company’s shares at $59 per share to raise roughly $269.3 million.

Transaction Details: The price tag includes cash and roughly $26 million in newly issued Hydrofarm's common stock, excluding a potential earn-out payment of around $21 million - subject to the achievement of certain performance milestones.

The total consideration is equal to around 9x Aurora’s 2021 Adjusted EBITDA, excluding synergies and including the net present value of estimated tax benefits resulting from the deal.

The acquisition of the Eugene, Oregon-based producer and supplier of organic hydroponic products is expected to close in July 2021.

Rothschild & Co agreed to serve as financial advisor and Perkins Coie is providing legal counsel to Hydrofarm for the transaction. Aurora’s financial advisor for the deal is B\VAL CPAs & Advisors, while Gleaves Swearingen serves as legal counsel.

What It Means For Hydrofarm: Under the agreement, Aurora will become a wholly-owned indirect subsidiary of Hydrofarm.

In addition, the transaction will bring Aurora’s Roots Organics and Soul soil, grow media and nutrients brands as well as its Procision perlite and peat moss professional mixes under the Hydrofarm’s helm.

Hydrofarm expects Aurora to generate roughly $60 million in net sales in 2021.

Bill Toler, chairman and CEO of Hydrofarm, is thrilled to take over Aurora and include it in the company's brand portfolio.

“Aurora has blazed trails for earth-friendly growers, and their Roots Organics line is very popular – a standout for its focus on microbe stimulants,” Toler said. “Aurora’s pioneering R&D lab work in plant nutrition over the past 10-plus years has led to the development of innovative products that improve yields for growers while simultaneously advancing science in a meaningful way.” 

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