Making another move: Agrify Acquires Lab Society
@spdking I assume they’ve given you an offer?
5 Likes
Lab Society’s annual revenue for 2021 was approximately $10 million, and the acquisition is expected to be accretive in early 2022. The Company inherits Lab Society’s intellectual property, talent, and outstanding reputation for quality and reliability.
The purchase price for Lab Society was $8 million, consisting of $4 million in cash and $4 million in unregistered shares of Agrify common stock, subject to adjustments as set forth in the definitive agreement. There is also an additional earnout opportunity of up to $3.5 million if the revenue generated from Lab Society’s products reaches certain milestones in 2022 and 2023.
I wish i was able to get a buy out for 80% of my 2021 revenue… Wow… what a great deal!
i would have thought Lab societys annual revenue to be WAY higher than 10m for last year…
22 Likes
Agreed, and that’s an insanely low multiple lol. License holders are generally only getting ~1.5x revenue because of 280e, the depressed prices in the Canadian stock markets, etc - none of which apply to Agrify.
4 Likes
Generally that evaluation/strike price is coming from a multiplier on their EBIDTA, not revenue. Top-line is a vanity number.
Congrats to Mike, Randy, and Patrick on getting a deal done that suits them and Lab Society!
4 Likes
I think that there may be some novice businessmen in this industry.
If youre selling out for $4m cash, and $4m BS stock, I would be worried as to why.
$10M evaluation, strong market history, and the future of other states going through recreational legalization.
Idk why anyone would sell themselves to Agrify, unless they wanna crack a beer and shotgun it with their new C-level bosses 
7 Likes
What your annual revenue is and what your evaluation is are two different things…
EBITDA X Industry Multiplier = Evaluation or Strike Price… .
I understand EBITA.
I have worked to bring about 4 or 5 companies EBITA’s up, as they accepted public mergers or IPO offerings.
You, Zach, were one of the people that approached me like 4 or 5 years ago on that Costa Mesa shitshow job that I was consulting on, to do some design work for you.
I think like 50% of the market holders for equipment sales have tried aquire my brain to design equipment/engineer plans for them, at this point.
Not sure what you think your own evaluation is to be set at, but if you’re selling your companies stakes during the peak of the pandemic exit, before a housing market crash, either you’re just wanting to exit the equipment sales market out of exhaustion, and want to use the $$ to buy some cheap real estate about to be foreclosed, or youre a dumbass for not holding out longer past the market flip happening.
Just my $0.02, but what does my college educated ass know, seems like most these self taught consultants know better.
12 Likes
Thats the first thing i thought, thats not really very much for a company that size
4 Likes
Who is this Rohan? ?
2 Likes
What up ole buddy!
3 Likes
Not much man! The good ole Costa Mesa project, where they only had a 120gal solvent limit due to not building out the space correctly lol.
Hope you’re doing good!
2 Likes
Bro they ran through like 4 other consultants and architects before they just scaled down.
They dk wtf they’re doing.
Glad I have partners in land development that are GC’s and engineers that manage all that now for buildouts…
Hope you’ve been well, and congrats on the ETS partnership.
3 Likes
We could have crowd sourced 5 million on the forum and bought it ourselves.
7 Likes
Facts
If I had known the boys were in trouble, I would have started a GoFundMe
1 Like
I don’t think they were in trouble, I just think alot of companies that have been in the space are ready for a change or break.
After the hemp rise and fall, covid and three year pandemic, some of us that have been around for years doing this are just wore out lol.
I personally am stoked for Mike, Randy, and Patrick. Great guys.
9 Likes
They weren’t in trouble, this was their exit plan
12 Likes
It was double that the year before
Mike told me this was happening back when I signed the exclusive with them
2 Likes
I would have thought their exit plan would include more money and less working for Agrify for some future bonus . . . I love these guys and wish them the best. I just look at this deal and it doesn’t feel like what they deserved.
4 Likes
Ahh I see what you mean now
2 Likes