Hydrofarm Acquires Nutrient Company Greenstar Plant Products For $83M

Hydrofarm Holdings Group Inc HYFM closed on the acquisition of Canadian nutrient company Greenstar Plant Products, Inc., manufacturer of the Grotek and Gaia Green brands, for a purchase price of $83 million.
Greenstar will become a wholly-owned indirect subsidiary of Hydrofarm Holdings.
These brands join Hydrofarm's lineup of proprietary branded products in the lighting, climate control, nutrients, and growing media categories.
Hydrofarm has historically distributed Greenstar's Grotek and Gaia brands, representing ~50% of Greenstar's total net sales.
Hydrofarm expects Greenstar to generate approximately $26 million in net sales in 2021, representing significant growth from the prior year and expects the acquisition to enhance adjusted EBITDA margin for FY21.
The transaction represents an acquisition multiple of approximately 8x Greenstar's estimated 2021 Adjusted EBITDA.
The acquisition continues Hydrofarm's strategic efforts to acquire manufacturers of branded products in key CEA product categories, including Aurora and nutrient brands HEAVY 16, House & Garden, and Mad Farmer.
Hydrofarm funded the deal through a combination of cash and an existing credit facility. It held cash and cash equivalent of $62 million as of March 31, 2021.
Price action: HYFM closed lower by 0.85% at $49.02 on Tuesday.