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Top 3 SPAC Targets – Agriculture
by Nicholas Alan Clayton on 2022-07-15 at 7:18am

SPACInsider contributors Anthony Sozzi and Sam Beattie this week compiled their three favorite potential SPAC targets among companies in agriculture and related technologies. We look at why they are compelling and why each could be a fit for a blank-check merger.

Disrupting agriculture is a topic this series has touched upon before, and it has become unavoidable with looming food and supply chain crises. Even absent the acute factors that have pulled food security sharply into headlines recently, agriculture already represented a growing share of global GDP each year from 2018 to 2020, reaching 4.35% that year.

Not only will it need continued disruption to meet the demands of a growing population, but technology is needed to get new capacity around supply chain snags and meet both national and corporate environmental goals. The EPA estimates agriculture is responsible for 10% of the US’ greenhouse gas emissions. That counts just the cultivation itself, but it has further impacts in the chain of logistics required to get agricultural goods freshly to market.

Perhaps more importantly for SPACs, the agricultural sector tends to be resilient through recessions. It also feeds into end products – food – that consumers are not going to forgo even in high inflation, although they may burn down a few politicians’ mansions over prices.


Watsonville, California-based Driscoll’s has been steadily building a berry empire as a more than century-old company selling more than a billion clamshell containers of berries annually across North America and about 45 other countries.

It has recently been looking to expand this domain overseas, however. Earlier this month, it acquired Haygrove Africa trading, which had long supplied it with blueberries grown in sub-Saharan Africa. In addition to securing this supply, Driscoll’s also gained ownership of the South African company’s patents and licenses over certain berry types as well as its proprietary polytunnel growing system.

This followed a move in June to acquire the UK’s largest berry grower co-operative Berry Gardens, which had grown and marketed Driscoll’s branded products in the UK market for 20 years. There are likely plenty of other corners of Driscoll’s operations where it could further vertically integrate, especially with liquid share capital and additional cash on hand.

The moves follow several years of increased focus on building out its own portfolio of intellectual property. It has secured patents for 47 new berry varieties or growing processes since 2018, according to Pitchbook. But not all of this work has been organic.

In 2019, it participated in a venture round raised by Harvest CROO Robotics, which is developing automated strawberry-picking vehicles. It followed this up by investing in a $140 million Series D raise by vertical farming technology company Plenty.

Behind all of this effort is not just seeking economies of scale and technological efficiencies, but also a means of gaining value-adds on the produce shelf. In May, it launched Tropical Bliss – its range of “high-flavor” strawberries ranging in color from the traditional red to rosé and white, each with different taste characteristics.

While breeding trendy new berry varieties is very much in its wheelhouse, it’s just scratching the surface of what it could do in delving further into packaged and value-added products like smoothies and juices. The fastest way to that might be in keeping its M&A at full tilt. And, if the public markets beckon, the family-run company would likely be more attracted to potential SPAC terms that can protect upside and downside after watching its competitor Dole (NYSE:DOLE) fall -43% since its July 2021 IPO.

Farmers Business Network

Modern agricultural producers are subjected to the constantly changing sea changes of the global economy but generally only have legacy systems to turn to as they seek to keep up with the times.

San Carlos, California-based Farmers Business Network (FBN) has set out to be a one-stop shop for agricultural producers offering a more transparent marketplace for supplies, finance and marketing options as well as insurance. Like digitization specialists in other industries it also uses its platform to keep tabs on the performance of seed types and other enhancements across its aggregated network of about 43,000 farmers.

This allows it to monetize data in addition to the fees collected in the marketplaces it has created for grain markets. As such, it appears to be angling for a position to be an Amazon (NASDAQ:AMZN) for the farm sector, and is facing the corresponding resistance from legacy companies. As if to lean into the comparison, FBN partnered with Amazon in 2018 to provide its members discounts on tools and other goods bought on Amazon’s platform.

It has gained significant scale with these efforts, passing over $100 million in annual revenue by at least 2020. And, it was last valued at $3.8 billion in a November 2021 Series G round led by frequent SPAC PIPE investors Fidelity, T. Rowe Price (NASDAQ:TROW) and BlackRock (NYSE:BLK).

Getting these players to double down would seem to make for an easier PIPE roadshow and a variety of SPAC teams could be in the mix. Gladstone (NASDAQ:GLEE), led by long-time farmland investor David Gladstone, has an upcoming transaction deadline in November. But, several SPACs with broader initial search mandates could also be fits. RCF (NYSE:RCFA) and its $230 million trust could be in play with its CFO coming from agri-giant Bunge (NYSE:BG) as well as Sustainable Development I (NASDAQ:SDAC) and its roughly $316 million in play led by Nicole Neeman Brady who has significant experience in water supply and agriculture.

Upward Farms

Vertical farming and high-tech greenhousing have been up-and-down subsectors for SPACs.

Greenhouse farmer AppHarvest (NASDAQ:APPH) started a trend with its combination with Novus in February 2021 and vertical farmer Local Bounti (NYSE:LOCL) closed with Leo III last November. But, AppHarvest last closed at $3.95 while Local Bounti closed Thursday at $4.01 amid concerns they weren’t scaling fast enough in addition to macro headwinds.

But, Upward Farms has an extra wrinkle that comes from antiquity rather than modern innovation. It uses ancient practices of aquaponics, in which plants grow from soil enriched by water that fish are freely swimming through and enriching with their manure.

The Brooklyn-based company has raised $154 million to date, last achieving a valuation of $460 million in a June 2021 Series B, according to Pitchbook. Much of its most recent funding was directed towards opening its third farming location – a 250,000 square foot facility in Pennsylvania.

This larger footprint marks a slight departure from its vertical farming base but also gives it the capability of supplying greens and fish to markets hosting a population of about 100 million within a distribution route of a single day. With two existing farms up and running and sales from the Pennsylvania location expected to come in 2023, Upward Farms dodges some of the risk in earlier SPAC targets with more diversified offerings to boot.



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