ASX pot-stock RotoGro scores key fertigation acquisition

By Zoe Gross. Published at May 17, 2018, in Biotech

Cannabis tech company, RotoGro World Wide (ASX:RGI), announced today that it is acquiring the fertigation assets and ongoing contracts of Hanson’s Water Treatment Inc., via its wholly owned subsidiary, Global Fertigation Solutions (GFS).

This acquisition gives RGI leverage to Hanson’s specialised fertigation business line for water treatment and nutrient management in the viticulture, perishable foods and legalised cannabis space.

Fertigation is the injection of fertilizers, soil amendments, and other water-soluble products into an irrigation system. Notably, fertigation is paramount to modern hydroponics, making this acquisition a pivotal one for RGI, whose business is centred around stackable hyroponics garden systems.

The fertigation solution developed by the Las Vegas-based Hanson is a patent-pending, fully-automated nutrient delivery system, which purifies source water and adds client-specified recipes of nutrients to maximise yields and optimise cost efficiencies during the growth cycle of each crop.

To date, Hanson Fertigation has successfully provided design solutions, installations and ongoing service for more than 12 licensed lawful cannabis facilities in the State of Nevada.

Hanson president, Stephen C. Everett, commented: “We are very excited with the acquisition by RotoGro as it will accelerate the global expansion of our patent-pending fully-automated nutrient delivery system.

“With more than 30 years of market-proven experience working in the water treatment, agriculture and nutrient space, starting with viticulture and perishable foods, we have been able to drive risk reduction and economies of scale, integrating technology and science to the art of growing.”

RGI managing director, Michael Carli, said: “The acquisition of Hanson Fertigation is a key milestone in building the full suite of capabilities to provide our customers with a turnkey solution from ‘concept to harvest’. The fertigation business is the first cornerstone in our third vertical that provides solutions to all forms of agriculture: from field crops to greenhouses to flat deck hydroponics.

“This acquisition expands the RotoGro Rotary Garden System capabilities on an enterprise level,” added Carli. “The opportunities for revenue growth are immense, with secured orders to date in excess of USD$1M for 2018. Building on the focused penetration in Nevada, the opportunities across all agricultural applications globally are very exciting”.

It’s worth noting here that this is an early stage play and investors should seek professional financial advice if considering this company for their portfolio.

The acquisition sees RGI acquiring 100 per cent of the Hanson Fertigation assets, intellectual property, ongoing contacts, key personnel, industry know-how and business goodwill.

The acquisition consideration is equivalent to three times Hanson Fertigation’s 2017 financial year EBITDA. The agreed valuation will be paid through the issue of 5,000,000 fully paid ordinary shares in the capital of RGI.

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