Deveron Corp., a leading agriculture digital services and insights provider in North America, is pleased to announce it has entered into a definitive agreement to acquire the assets of Stealth Ag, Inc., a digital agronomy company, with offices in Minnesota and Iowa.
Stealth Ag provides soil sampling services and digital management across 800,000 acres of customers on varying levels of annual engagement. Stealth Ag’s unaudited 2020 revenue was US$0.7M and EBITDA of US $0.2M. This acquisition further accelerates Deveron’s strategy of increasing access to leading, local agriculture service providers that influence key farm customers in the United States.
Brent Hjelmeland, CEO of Stealth Ag, commented, “I couldn’t be more excited to have Stealth Ag join the Deveron team. Deveron’s turn-key analytics and technology solutions can help agribusinesses focus on the customer’s needs to improve yield and reduce costs. We look forward to leveraging Deveron’s technology to further facilitate Stealth’s current growth profile as we continue to expand our influence in Minnesota and Iowa.”
“Stealth Ag is a tremendous leader in soil data services and agronomic solutions in Minnesota and Iowa,” said David MacMillan, Deveron’s President and CEO. “With Stealth we are acquiring local leaders, a powerful client base and a significant increase in service density capabilities for our growing, North American focused service network. We look forward to working with Brent and his team to leverage Deveron’s technology stack to increase their influence across Minnesota and Iowa’s combined 66 million acres of farmable land. At the same time, we also see this as an accretive opportunity for our customers looking for reliable and standardized data services increasing our capabilities of providing one-vendor solutions to our customers that have interests across multiple states in the US.”
As consideration for the Acquisition, Deveron has agreed to: (i) pay Stealth Ag an initial cash payment of US$800,000 upon signing of the Definitive Agreement and an aggregate of US$150,000 on each of the first two anniversaries of the signing of the Definitive Agreement; and (ii) issue such number of common shares in the capital of the Company (the “Common Shares”) equal to US$175,000 at a price of $0.86 per Common Share upon receipt of the approval of the TSX Venture Exchange (the “TSXV”) and an additional number of Common Shares equal to US$187,500 at a price of $0.86 per Common Share on each of the first two anniversaries of the signing of the Definitive Agreement. (iii) pay First Southeast Bank (“The Lender”) US $106,525.81 representing the amount due by Stealth Ag to Lender upon signing of the Definitive Agreement.
Under the terms of the Acquisition if certain milestones are met, Deveron has agreed to pay an additional US$270,000 as follows:
- US$40,000 in cash and issue such number of Common Shares equal to US$40,000 in the event that during the 12-month period (the first earn-out period), commencing January 1, 2021, Stealth Ag exceeds gross revenue of US$1,000,000.
- US$50,000 in cash and issue such number of Common Shares equal to US$50,000 in the event that during the 12-month period following the first earn-out period (the second earn-out period), Stealth Ag exceeds gross revenue for the prior twelve month period by at least US$250,000.
- Issue such number of Common Shares equal to US$90,000 in the event that Stealth Ag adds 400,000 unique acres to Farm Dog during the 24-month period following execution of the agreement.
The completion of the transaction remains subject to all regulatory and other approvals, including the approval of the TSX Venture Exchange.
