Business
urban-gro, Inc. Completes Acquisition of MJ12 Design Studio and Forecasts the Addition of $7-$9M of High Margin Services Revenue
Management expects MJ12 Design Studio and its parent company to generate $7-$9 million of revenue and $1.5-$2.0 million of Adjusted EBITDA over the next
About this update from Urban-gro, Inc.
[{"type":"text","content":"Management expects MJ12 Design Studio and its parent company to generate $7-$9 million of revenue and $1.5-$2.0 million of Adjusted EBITDA over the next 12-month period; Management expects that the synergies of adding architectural planning and design services to its existing solutions offering will add incremental engineering services and cultivation equipment revenues of more than $10 million over the next 12-month period; Acquisition drives high margin services revenue and adds approximately 70 open projects, allowing the Company to now offer on-site project management and complete design packages for retail, extraction facilities, and processing facilities. LAFAYETTE, Colo., Aug. 02, 2021 (GLOBE NEWSWIRE) -- urban-gro, Inc. (Nasdaq: UGRO) (“urban-gro” or the “Company”), a fully-integrated architectural, engineering and cultivation systems integration company for commercial cannabis and food-focused Controlled Environment Agriculture (“CEA”) facilities, today announced that it has completed the acquisition of MJ12 Design Studio and associated companies, 2WR of Georgia and 2WR of Colorado (2WR+ Partners). The acquisition extends urban-gro’s services into early-stage conceptual design and planning, and it creates the industry’s first fully integrated architecture, engineering, and cultivation systems company serving the cannabis and food-focused CEA sectors. urban-gro funded the $9.1 million transaction with a combination of cash and UGRO common stock (issued out of corporate treasury stock from prior buyback program), including contingent consideration of up to $2.0 million based on achievement of certain performance metrics. The company expects the transaction to be accretive to earnings within the first year and drive significant waterfall revenue opportunities for urban-gro’s existing suite of products and services. In a pandemic-impacted 2020, 2WR+ Partners improved upon 2019 numbers and reported revenue of $6.2 million, net income of $0.9 million, Adjusted EBITDA of $1.0 million, a gross margin of 43% and an operating margin of 16%. “In addition to increasing the value to our shareholders through an increased earnings per share in the first year following consolidation, we believe that this acquisition creates more than $10 million in incremental waterfall revenues for our existing offerings of engineering and design serv...