Hardware and software cultivation solutions developer Agrify Corporation (NASDAQ:AGFY) announced Thursday that it has signed a definitive agreement with its first Arizona-based customer, Olive El Mirage Partners LLC.

The Deal Details

Under the terms of the agreement, Agrify will work with Olive El Mirage on the build-out of its 30,000 square foot facility.

The construction includes the installation of 400 of Agrify's vertical farming units along with integrated catwalks and grow racks as well as pest mitigation solutions.

Valued at roughly $23.8 million, the deal includes $9.4 million for the purchase of 400 VFUs and recurring SaaS revenue at a value of $14.4 million derived from Olive El Mirage's use of the Agrify Insights cultivation software over 10 years.

Olive El Mirage will have up to 90 days to determine whether to proceed with a cash purchase of the VFUs or finance this transaction, both parties confirmed.

In addition, Olive El Mirage will cover the cost of the construction and facility build-out with its own internal capital.

Why It Matters

The deal allows Agrify, based in Billerica, Mass., to enter into the Arizona cannabis market.

It will also enable Olive El Mirage to establish itself "as the market leader of premium cannabis products in Arizona," said Alexander Catucci, CEO of Olive El Mirage.

"We believe our partnership with Agrify will give us the potential to develop deeper long-term customer relationships earlier in our lifecycle, by delivering high-quality products at an optimized yield with unparalleled consistency at a significantly lower cost," Catucci added.

More news from Agrify:

Agrify Second Quarter Revenue Rises 203% To $11.8M, Reaffirms Its Full-Year Guidance Of $48 to $50M

AGFY Price Action

Agrify's shares traded 2.59% higher at $15.82 per share at the time of writing Thursday morning.

Photo: Courtesy of Agrify Corporation