Special report: Rotary hydroponics play RotoGro has added to its horticulture arsenal, this morning announcing its acquisition of US-based Hanson Fertigation.

RotoGro (ASX:RGI) will acquire 100 per cent of its “fertigation” assets, giving them a specialised business line for water treatment and nutrient management in viticulture, perishable foods, and the lawful cannabis space.

Fertigation is the injection of fertilisers, soil amendments, and other water-soluble products into an irrigation system. It’s complementary to the company’s existing rotary hydroponics unit business.

Hanson is incorporated in the US State of Nevada, where cannabis is legal for recreational use.

US users are already buying about $US50 billion worth of marijuana a year — a number expected to grow to $US75 billion in sales by 2030, says research firm Cowen & Co.

To date, Hanson has successfully provided design solutions, installations and ongoing service for more than 12 licensed lawful cannabis facilities in the state.

Theirs is a patent-pending, fully-automated nutrient delivery system that purifies source water and adds client-specified recipes of nutrients to maximise yields and optimise cost efficiencies during the growth cycle of each crop.

As part of the deal RotoGro will take on all of Hanson’s assets, intellectual property, ongoing contracts, key personnel, industry know-how and business goodwill for $1.75 million.

RotoGro's 420 system.
RotoGro’s 420 system.

That’s three times Hanson’s 2017 earnings.

Payment will be made through the issue of 5 million shares in the company, as well as performance shares.

Key milestone for RotoGro

“The acquisition of Hanson Fertigation is a key milestone in building the full suite of capabilities to provide our customers with a turnkey solution from ‘concept to harvest’,” managing director Michael Carli told the market.

“The fertigation business is the first cornerstone in our third vertical that provides solutions to all forms of agriculture: from field crops to greenhouses to flat deck hydroponics.”

He said the opportunities for revenue growth were immense describing the opportunities across all applications globally are “very exciting”.

RotoGro’s major focus until now has been the aptly named Model 420, a hydroponic vertical growing system where seedlings rotate in a wheel around a central lamp to optimise electricity, water, food and floor space.

The systems have been in hot demand – the company last month commencing production of a $2.3 million purchase order for Miracle Valley Medicinal Alternatives in Canada.

With Hanson’s Nevada proof-of-concept under its belt, the company hopes it will be able to take the fertigation tech global.

“We are very excited with the acquisition by RotoGro as it will accelerate the global expansion of our patent-pending fully-automated nutrient delivery system,” Hanson president Stephen C. Everett said.

“With more than 30 years of market-proven experience working in the water treatment, agriculture and nutrient space starting with viticulture and perishable foods, we have been able to drive risk reduction and economies of scale, integrating technology and science to the art of growing.”


This special report is brought to you by RotoGro.

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