ASX-listed CropLogic to spend up to A$320k to buy Tasmania-based Ag Logic
By Paul McBeth
April 3 (BusinessDesk) - Kiwi agritech company CropLogic will spend up to A$320,000 in cash and scrip to buy Tasmanian agri services firm Ag Logic to develop an Australian beachhead.
Christchurch-based CropLogic, which is listed on the ASX, has signed a conditional share sale agreement to buy the Tasmanian firm, which would see it pay A$160,000 in cash and $160,000 in shares. Half of the acquisition price would be at the time of settlement, and two further payments depending on meeting earnings targets, CropLogic said in a statement. The deal values Ag Logic at 1x revenue and would employ Ag Logic's Reuben Wells on a base salary of A$100,000 a year with incentives of up to A$60,000.
"The CropLogic board sees this as a very strategic acquisition in the Australian marketplace and one that will provide us with significant growth opportunities as we build towards commercial outcomes in the Australian market," managing director Jamie Cairns said. "While we continue to look at other acquisition and commercial opportunities, I can see the potential for this acquisition to punch well above its weight and it has been prioritised accordingly."
The company, which counts Powerhouse Ventures and the New Zealand Venture Investment Fund as shareholders, raised A$8 million in a fully subscribed share offer last year. CropLogic issued 40 million ordinary shares at an issue price of 20 Australian cents per share, with A$5 million of the capital raised underwritten by Hunter Capital Advisors.
The shares jumped 19 percent, or 0.8 of an Australian cent, to 5.1 cents. The stock has more than halved so far this year.
The CropLogic system gathers field data, via in-field sensors coupled with satellite communications, to help growers improve the productivity of their crops. Successful trials of the CropLogic system have been completed on potatoes in China, the US, Australia and New Zealand with four of the major multinational potato processors. Further to this, CropLogic is poised to start trials of the CropLogic system in other commodities such as corn, wheat, soybean and cotton.
The deal is contingent on successful due diligence and is expected to settle on April 19.