GrowGeneration Mutually Terminates HGS Acquisition, Buys All Seasons; Cuts FY21 Sales View

GrowGeneration Corp. (GRWG), a chain of specialty hydroponic and organic garden centers, on Wednesday said it has mutually terminated previously signed deal to acquire HGS Hydro. Following the termination of the planned acquisition, the company has revised down its revenue guidance down for the current fiscal.

In addition, it announced the acquisition of All Seasons Gardening, an indoor-outdoor garden supply center, indicating its entry into the New Mexico's cannabis market.

Commenting about the termination of the acquisition, Darren Lampert, GrowGeneration's CEO said, "Importantly, our near-term objectives are to build and acquire garden centers in new markets that are growth opportunities for the Company." 

Now, with the acquisition of All Seasons Gardening, GrowGen's portfolio of hydroponic garden centers now includes 63 stores across 13 states. The Albuquerque-based All Seasons Gardening is an indoor-outdoor garden supply center specializing in hydroponics systems, lighting, and nutrients.

"The All Seasons Gardening acquisition is a testament to our continued investment in best-in-class hydroponic suppliers in emerging adult-use markets across the U.S.," said Darren Lampert, GrowGeneration's CEO.

"Importantly, it represents our entry into New Mexico's cannabis market, which is projected to become a $1 billion industry by 2026," he added.

As part of the transaction, All Seasons Gardening' team of nine employees are expected to join GrowGeneration's team of over 500 grow professionals.

GrowGeneration cut its sales guidance for current fiscal following the termination of the HGS Hydro deal. The acquisition was to add revenue of about $20 million for the acquirer during 2021. The company now expects its FY21 revenue in the range of $440 million - $452 million, compared with its previous guidance of $455 - $475 million.

It also sees adjusted EBITDA for the full year of $47 million-$51 million.

At NasdaqCM, GrowGeneration had closed at $23.75 per share, on Tuesday, a rise of 2.50 percent, compared to its previous close of $23.17 per share.

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