HydroGreen manufactures fully-automated hydroponic growing systems that produce live, green animal feed
Image: The HydroGreen automated three-section growing system for animal feed. Photo: courtesy of CubicFarm Systems Inc.
Ag-tech company CubicFarm Systems has signed a binding purchase agreement to acquire US-based arm’s-length private firm HydroGreen.
Based in South Dakota, HydroGreen is involved in the manufacturing of fully-automated hydroponic growing systems that produce live, green animal feed based on animal health and performance.
The deal is said to be completed through a reverse triangular merger of CubicFeed Systems U.S. Corp and HydroGreen. It will be renamed as “CubicFeed Systems U.S. Corp”, and works as an indirect and wholly-owned subsidiary of CubicFarm.
As per the terms of the deal, HydroGreen shareholders will secure an aggregate of 11,000,000 common shares of CubicFarms based on the adjustment of working capital.
HydroGreen CEO Dihl Grohs said: “I am incredibly proud of HydroGreen’s growth trajectory since our first system prototype was built in 2014 in Sioux Falls, South Dakota, then progressively refined to achieve today’s 98% reliability rating and the system’s ability to monitor and correct issues in advance.”
HydroGreen’s system performs all growing functions such as seeding, watering, lighting, harvesting and re-seeding
With minimal use of land, labour and water, the HydroGreen’s advanced process sprouts grains such as barley and wheat in a controlled environment.
By simply pushing a button, the company’s system carries out all growing functions including seeding, watering, lighting, harvesting and re-seeding to deliver animal feed, helping to avoid the investment in fertiliser, chemicals, fuel, field equipment and transportation.
HydroGreen growing system is composed of a 10ft by 8ft rack with 8ft by 6ft growing surfaces stacked six layers high to a total height of 10ft.
The company also offers from one-section to six-section systems, which are 50ft long, 8ft wide and 10ft high.
The modular system enables farmers to combine multiple systems to feed hundreds or thousands of livestock.
According to the company, seeding one growing surface each day with 1.8 bushels of seed can produce 487 pounds of animal feed every six days.
A one-section system holds the capacity to produce feed for a 20 to 25-cattle farm, while a three-section system can produce feed for a herd of 100.
Subject to the approval of the TSX Venture Exchange and other customary closing conditions, the deal is expected to be completed by the end of this month.
Also, CubicFarms has signed an authorised reseller agreement with Artex Feed Solutions, which is a joint venture company that is 25% owned by CubicFarms and 75% owned by Artex Barn Solutions.
CubicFarms CEO Dave Dinesen said: “This landmark transaction with HydroGreen is a catalyst for continued growth at CubicFarms. Having already established a robust sales pipeline for our fresh produce vertical, this acquisition will enable us to capitalize on technology and automation synergies with HydroGreen to capture the animal feed space, which we believe could be a larger market than fresh produce.”