Hydrofarm Holdings Continues Buying Spree With $83M Purchase Of Greenstar Plant Products

Hydroponics equipment producer Hydrofarm Holdings Group HYFM confirmed Tuesday it has acquired a Canadian nutrient business Greenstar Plant Products, Inc. for $83 million.

What happened 

Hydrofarm funded the purchase price of $83 million for the Greenstar acquisition using both cash and the company’s current credit facility. Rothschild & Co. acted as a financial advisor and DLA Piper as a legal advisor to the company. 

Under the agreement, the producer of the Grotek and Gaia Green brands will become a wholly-owned indirect subsidiary of Hydrofarm.

Why it matters 

Greenstar is projected to hit around $26 million in net sales this year, which should be a significant improvement from 2020. Previously, Hydrofarm was distributing Greenstar’s Grotek and Gaia brands accounting for around 50% of Greenstar’s total net sales.

The acquisition should improve Hydrofarms’ adjusted EBITDA margin for the 2021 fiscal year, making the transaction accretive through the addition of Greenstar’s manufacturing profit margin profile and the part of the sales that it did not previously represent.

The purchase is part of the company’s strategic plans to buy producers of branded products in the nutrients, lighting, climate control and media sectors.

 “With a long relationship that has grown organically over the years, the addition of Greenstar to the Hydrofarm family feels like a natural next step in our efforts to broaden our company’s footprint and strengthen our product portfolio,” Bill Toler, chairman and CEO of Hydrofarm stated.

“We’re excited about the many opportunities becoming a part of Hydrofarm will create and to play a role in the company’s growth,” said Michael Nemirow, CEO of Greenstar Plant Products, Inc. “Over the years, we’ve established a great working relationship based on a passion for the future of Controlled Environment Agriculture and the horticultural market overall, along with our shared commitment to delivering quality products and service.”

The purchase comes on the heels of the previous one, when the Fairless Hills, Pennsylvania-based company acquired Oregon-based organic hydroponic products manufacturer and supplier Aurora Innovations, Inc., Aurora International, Inc. and Gotham Properties LLC for $161 million.

Click here to listen to Cannabis Daily Podcast for daily news and podcasts. 

Price action

Hydrofarms’ shares closed Tuesday market session 0.85% lower at $49.02 per share.

Photo: Courtesy of CRYSTALWEED cannabis on Unsplash

Posted In: Bill TolerHydrofarm Buys Greenstar Plant ProductsMichael NemirowCannabisNewsMarkets

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.