No more Agro…

By Frank Buhagiar on Monday 24 April 2023

No more Agro…
Image source: No more Agro…
CommentaryFoodTech Investment

Food on the Move: FFF’s weekly roundup of listed FoodTech’s movers & shakers

Was that it? Listed FoodTech’s post-Easter rally didn’t last long – the sugar high last-week’s Food on the Move (‘Easter eggs and endorphins’) suggested might have been in play appears to have disappeared just as quickly as it…well…appeared. The week ended 21 April 2023 saw 29 share price fallers, 16 risers and three non-movers in FFF’s listed FoodTech space.  Eagle-eyed readers will note 29 + 16 + 3 = 48, one short of the usual 49.  No mistake made.  That’s because earlier this month, AgroFresh Solutions (AGFS) reported “the closing of its previously announced go-private transaction with investment funds affiliated with Paine Schwartz Partners…”

At the time, CEO Clint Lewis said, “I would like to extend my sincere appreciation to all of the Company’s stockholders for their support and trust over our eight-year history as a public company. Completing this transaction with Paine Schwartz marks an exciting new chapter for the business, creating significant opportunities for AgroFresh to build upon our diversification strategy and further support our customers in their efforts to grow and distribute an abundant supply of sustainable fresh produce around the world.”

Paine Schwartz CEO Kevin Schwartz added, “We are pleased to complete this transaction and to support AgroFresh as it moves forward as a private company. We believe that with a stronger financial foundation, AgroFresh will be even better positioned to unlock value and capture growth opportunities as the Company meets the increasing demand for fresh solutions. We look forward to working closely with the AgroFresh team in this next phase as the Company pursues expansion initiatives, invests in innovation and advances its mission of preventing food waste and conserving the planet’s resources.” Hmm, what price AGFS follows the standard private equity ownership path – expansion followed by going public again? And with companies across the space finding the going increasingly hard, will AGFS trigger a flurry of go-private transactions?  Questions, questions, questions…

Going private does not necessarily mean however that this will be the last time Food on the Move covers AGFS.  In June 2022, AGFS unveiled a partnership with Novozymes “…to explore development of biological solutions to combat post-harvest waste”.  In the announcement AGFS’ Chief Technology Officer Duncan Aust said: “AgroFresh and Novozymes share very similar missions around sustainability and the introduction of differentiated technologies to address unmet needs across the food chain.”  Who knows how the partnership will fare now that AGFS is in private hands but Novozymes already has a lot on its plate after shareholders recently approved its proposed tie-up with Chr. Hansen.

As reported by Food on the Move’s ‘Reasons to be positive’ in December 2022: “The world's largest industrial enzymes producer is forking out DKK660.55 per Chr. Hansen share, an implied 49% premium to the takeover target’s pre-announcement share price.” And if that’s not enough to keep management busy, Novozymes’ Q1 results are due to be released on 26 April.  Didn’t stop the shares from finishing the week up 6.5% to close at DKK366.4.  Someone somewhere expecting a decent set of numbers?

Another good week for Agrify (AGFY). Having tacked on 27% after announcing the “Completion of Total Turnkey Cultivation Facility Denver Greens Pending Final Inspection”, the cannabis solutions provider added a further 23% over the course of the week ended 21 April 2023.  Talk about good timing, as AGFY is planning to raise up to US$1.84 million: “On April 18, 2023, the Company reduced the exercise price of all the Existing Warrants from $0.65 per share to $0.1725 per share…If all are exercised, the exercise of the 10,651,430 Existing Warrants is expected to result in gross proceeds to the Company of $1.84 million.” With the shares closing at USD0.224, the newly-priced warrants are in the money.  But is it enough of a buffer to…warrant consideration?

Finally, Steakholder Foods (STKH) posted a 26.5% gain after Israeli Prime Minister Benjamin Netanyahu paid a visit to the company’s industrial-scale 3D bio-printer facilities.  The premier even tasted STKH’s “3D-printed cultivated fish fillet, printed with Steakholder Foods’ customized bio-inks using Umami Meats’ fish cells. The tasting also included Steakholder Foods’ beef product grown with ethically harvested cells in the Company’s facilities.” The Prime Minister sounds impressed: “Today we ate fish that was produced without fish and meat that was produced without cattle. This is a global revolution. Israel is a global leader in the field of alternative protein and we will see to it that we continue to lead.”

Despite rising to US$0.8, STKH’s shares are still a way off the US10 level they were trading at as recently as March 2021.  A share price well below previous peaks; a thumbs up from a Prime Minister – could STKH be a candidate for a future go-private transaction?