A SPAC Deal Sprouts For AgTech Company Local Bounti: What Investors Should Know
Chris Katje, Benzinga Staff Writer
June 18, 2021
Agriculture technology continues to be a hot segment for companies seeking to go public with another SPAC deal in the sector announced Friday morning.
The SPAC Deal: Local Bounti announced a SPAC deal with Leo Holdings III Corp LIII 0.71% valuing the company at $1.1 billion.
One of the company’s key investors is Cargill which is listed as a strategic partner and will invest in the company as part of the SPAC deal. Cargill will also provide a $200 million debt facility to help with Local Bounti’s expansion plans.
Public LIII shareholders will own 24.8% of Local Bounti if the merger is approved. Shares will trade on the NYSE as LOCL.!
About Local Bounti: One of several companies in the controlled environment agriculture segment, Local Bounti is seeking to improve the production of fresh produce across the United States.
Controlled environment agriculture is the future of farming according to Local Bounti’s presentation. This practice includes year-round farming, using 90% less water, zero pesticides, and providing cost-competitive produce.
The company uses proprietary technology to grow leafy greens and herbs in an indoor environment. Current products include cut lettuce, living lettuce and living herbs such as basil and cilantro.
Local Bounti products are currently in more than 400 retail stores, according to the company.
Related Link: Indoor Farming Startup AppHarvest Aims For Wall Street With SPAC Deal
Growth Ahead: Local Bounti will use capital from the SPAC deal to build out its indoor farming facilities across the Western U.S.
It plans to double the size of its flagship Hamilton, Montana facility and to break ground on additional facilities by the end of 2021. The company’s pipeline includes eight facilities and a plan for 30 SKUs by the end of 2025.
Local Bounti lists the total addressable market size of $30 billion for vegetables and herbs in the U.S. with a $10.6 billion market in Western U.S.
“Today’s announcement takes Local Bounti to the next level in enabling local, sustainable production and delivery of fresh, delicious and nutritious produce, including in regions that traditionally don’t have access to local supply, starting in the Western U.S. and expanding globally,” Local Bounti co-founder and co-CEO Craig Hurlbert said.
Other long-term growth plans for Local Bounti include international expansion, subscription as a service, new products and franchising and licensing.
Local Bounti joins companies like Appharvest Inc APPH 1.29% and AeroFarms, merging with Spring Valley Acquisition Corp SV 0.1% to choose the SPAC route to go public.
Financials: Local Bounti highlights its low-cost operations and high yield thanks to a hybrid facility configuration and vertical farming.
The company hit its first revenue in 2020. Projections are for the company to hit $13 million in revenue for fiscal 2022 and $85 million for fiscal 2023.
By 2025, the company expects to hit over $400 million in annual revenue.
LIII Price Action: LIII shares are up 1.44% to $9.87 on Friday morning at publication.
(Photo: Local Bounti)