Vertical farming technology and infrastructure provider Nature’s Miracle Holding Inc. and Agrify Corporation ( AGFY ) announced Thursday that both parties have signed a definitive agreement and merger plan.

Under the deal, a new wholly-owned subsidiary of Nature’s Miracle will merge with and into Agrify ( AGFY ), which will survive as a wholly-owned subsidiary of Nature’s Miracle.

The signing of the agreement directly follows the previously announced term sheet for the merger, according to a press release.

Deal Details

Pursuant to the agreement, shareholders of Agrify ( AGFY ) will be issued 0.45 of a share of Nature’s Miracle common stock for each share of Agrify ( AGFY ) common stock they hold. Agrify shareholders are anticipated to collectively own roughly 30% of the post-merger common stock of the combined companies.

Additionally, Nature’s Miracle agreed to purchase and guarantee certain senior and junior notes issued by Agrify ( AGFY ) with a combination of cash and Nature’s Miracle stock.

Why It Matters

The deal is expected to bring a meaningful revenue stream for Nature's Miracle through Agrify's ( AGFY ) powerful SaaS and AI technology, which can be applied to the former's vertical farming business, the company said. Agrify ( AGFY ) also has a significant market share in cannabis extraction as it continues to drive revenue growth.

The merger would also result in a combination of management teams of both Miracle and Agrify ( AGFY ).

See also: Ancillary Cannabis Co.’s Stock Surges On News Of Merger With California Provider Of CEA Products And Solution

What's Next

The transaction is expected to close in the second half of 2024, subject to shareholder approval and other customary closing conditions.

Once the merger is completed, the management will focus on increasing Nature’s Miracle’s market share supported by the alliance of the core business segments of each company including LED lighting, grow feed, indoor farming control systems, AI-enabled technology and software, and operations to source product in Asia and expand manufacturing in the U.S.

“As we work towards merger completion, we are confident that the “one” Nature’s Miracle and Agrify ( AGFY ) business will result in significant market share growth as consumer adoption increases across the vertical farming agriculture industry," James Li, Nature’s Miracle CEO said.

Raymond Chang, CEO and chairman of the board of Agrify ( AGFY ), praised the new collaboration.

"The combined forces of Agrify ( AGFY ) and Nature’s Miracle will elevate our innovative, disruptive, and high-quality technology and service offerings for both the cannabis and agriculture industries," he said. “We believe the cannabis industry needs consolidation."

Some industry experts anticipated the consolidation trend to grow in the space. Ultimately, the industry will consolidate down to "five or six players," said MariMed CEO Jon Levine at one of previous Benzinga events. And, based on current trends, that's where the industry is heading "in the foreseeable future," according to Miles.

The 19th Benzinga Cannabis Capital Conference is returning to Chicago this Oct. 8-9. Get your tickets now before prices surge by following this link.

NMHI Price Action

Nature’s Miracle's shares traded 4.42% higher at $0.8677 per share during the pre-market session on Thursday morning.

AGFY Price Action

Agrify's ( AGFY ) shares traded 2.04% higher at $0.3 per share during the pre-market session on Thursday morning.