Hydrofarm spends $58 million on another marijuana acquisition

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Hydrofarm Holdings Group entered an agreement to acquire Illinois-based Innovative Growers Equipment (IGE) for $58 million, the cannabis cultivation equipment maker’s fifth acquisition in 2021.

Pennsylvania-based Hydrofarm said in a news release that it will fund the acquisition through cash, a new credit agreement and $11.6 million in stock.

The transaction is expected to close in early November.

IGE is a manufacturer of LED lighting systems, racking and horticulture benches, a product range that complements Hydrofarm’s product line.

Hydrofarm said it expects IGE to generate $48 million in sales in 2021.

Since May, Hydrofarm has acquired Greenstar Products in Canada, Aurora Innovations in Oregon and House & Garden and Heavy 16 in California.

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In addition, Hydrofarm announced a $125 million senior secured, seven-year loan at a current annual interest rate of 6.5%.

Some of the funds from that credit facility will be used for the IGE acquisition.

Hydrofarm also released preliminary financial results for its third quarter ended Sept. 30.

Those results include estimated net income between $13.3 million and $18.3 million, based on sales ranging from $121 million to $124 million.