urban-gro Completes Acquisition Of MJ12 Design Studio, Expects Addition Of $7M-$9M High Margin Services Revenue

urban-gro Inc UGRO completed the acquisition of MJ12 Design Studio and associated companies, 2WR of Georgia and 2WR of Colorado (2WR+ Partners), extending its services into early-stage conceptual design and planning.
urban-gro funded the $9.1 million transaction with a combination of cash and common stock. It expects the transaction to be accretive to earnings within the first year and drive significant waterfall revenue opportunities for its existing suite of products and services.
In 2020, 2WR+ Partners reported revenue of $6.2 million, net income of $0.9 million, Adjusted EBITDA of $1.0 million, a gross margin of 43%, and an operating margin of 16%.
urban-gro expects MJ12 Design Studio and its parent company to generate $7 million - $9 million of revenue and $1.5 million - $2.0 million of Adjusted EBITDA over the next 12-month period.
MJ12 Design Studio Principal Sam Andras will join urban-gro's senior leadership team as Executive Vice President of Professional Services.
"In addition to increasing the value to our shareholders through an increased earnings per share in the first year following consolidation, we believe that this acquisition creates more than $10 million in incremental waterfall revenues for our existing offerings of engineering and design services as well as cultivation equipment sales," said Bradley Nattrass, Chairman, and CEO.
Price action: UGRO shares are trading higher by 3.54% at $9.65 on the last check Monday.