Agrify Corporation (NASDAQ: AGFY) has acquired Lab Society, a provider of distillation and solvent separation solutions for the cannabis extraction industry.
“We are ecstatic to add Lab Society to our portfolio of high-quality extraction solutions,” Raymond Chang, chairman and CEO of Agrify stated. “As federal legalization edges closer to reality, we believe the United States government will likely increase its role in setting the quality, consistency, and safety standards for medical and recreational cannabis products. By owning the top key solutions that produce the highest quality and the widest range of extracted cannabis products at scale, we expect it will provide Agrify with a significant competitive differentiation, enhanced customer value-add, superior industry leadership position and significant growth opportunities globally.”
WIth this acquisition, Agrify now has four of the top brand names in the industry:
- Precision Extraction Solutions – Market leader in developing and producing high-quality hydrocarbon extraction solutions
- Cascade Sciences – Market leader in developing and producing high-quality vacuum purge ovens and decarboxylation ovens
- PurePressure – Market leader in developing and producing high-quality solventless extraction solutions
- Lab Society – Market leader in developing and producing high-quality distillation and solvent separation extraction solutions
Combined, the four acquisitions listed above provide the most comprehensive extraction solutions from a single provider, with over 10,000 customers, including some of the best extraction labs in the industry.
Agreement Details
Lab Society’s annual revenue for 2021 was approximately $10 million, and the acquisition is expected to be accretive in early 2022. The Company inherits Lab Society’s intellectual property, talent, and outstanding reputation for quality and reliability.
The purchase price for Lab Society was $8 million, consisting of $4 million in cash and $4 million in unregistered shares of Agrify common stock, subject to adjustments as set forth in the definitive agreement. There is also an additional earnout opportunity of up to $3.5 million if the revenue generated from Lab Society’s products reaches certain milestones in 2022 and 2023.
