Shearman And Sterling

News March 14, 2022

Local Bounti Corporation Signs a Definitive Agreement to Acquire Pete’s

Shearman & Sterling advised Local Bounti Corporation (NYSE: LOCL, LOCL WS) (Local Bounti®), a breakthrough U.S. indoor agriculture company combining the best aspects of vertical and greenhouse growing technologies, in its definitive agreement to acquire California-based complementary indoor farming company Hollandia Produce Group, Inc., which operates under the name Pete’s®, for total consideration of $122.5 million, subject to customary adjustments. The transaction consideration will be comprised of $92.5 million in cash, expected to be provided pursuant to Local Bounti’s existing lending facility with Cargill, and the remaining $30.0 million of consideration payable in shares of Local Bounti common stock.

The transaction is subject to customary closing conditions and a condition that the purchase of certain real estate owned by Pete’s is completed. A Notification and Report under the Hart Scott Rodino Act was filed on January 18, 2022, and the waiting period expired on February 17, 2022. The transaction is expected to close early second quarter of 2022.

Pete’s is a California-based indoor farming company with three greenhouse growing facilities, including two operating facilities in California and one under construction in Georgia which is scheduled to begin operations in the second quarter of 2022. Pete’s has distribution to approximately 10,000 retail locations across 35 U.S. states and Canadian provinces, primarily through direct relationships with blue-chip retail customers, including Albertsons, Kroger, Target, Walmart, as well as Whole Foods and AmazonFresh.

Local Bounti is a premier controlled environment agriculture (CEA) company redefining conversion efficiency and environmental, social and governance (ESG) standards for indoor agriculture. Local Bounti operates an advanced indoor growing facility in Hamilton, Montana, within a few hours’ drive of its retail and food service partners. Reaching retail shelves in record time post-harvest, Local Bounti produce is superior in taste and quality compared to traditional field-grown greens. Local Bounti’s USDA Harmonized Good Agricultural Practices (GAP Plus+) and non-genetically modified organisms (GMO) produce is sustainably grown using proprietary technology 365 days a year, free of pesticides and herbicides, and using 90% less land and 90% less water than conventional outdoor farming methods.

The Shearman & Sterling team below included special consultant Kenneth Laverriere (New York-Compensation, Governance & ERISA) and associate Austin Grossfeld (New York-Intellectual Property Transactions).

The Team