RLF AgTech Ltd (ASX: $RLF) transformational acquisition and equity raising announcement

RLF AgTech Ltd (ASX: $RLF) has entered into a binding Business Sale Deed to acquire the business assets of LiquaForce Pty Ltd for a total of $4.5m. The acquisition will be funded through a combination of debt and equity financing, with RLF securing a new debt facility of approximately $2.9m and raising approximately $1.89m via placement. The acquisition is expected to be highly revenue and margin accretive, with material positive cash flow and EBITDA contributions to the company. RLF aims to establish a complete plant nutrition solution for Australian agriculture by acquiring LiquaForce, providing a strong foothold in Queensland and diversifying its sources of revenue.

Executive commentary on the acquisition and equity raising

We are delighted to announce the strategic and transformative acquisition of the LiquaForce's business, which we believe will be highly synergistic and revenue accretive, enabling the acceleration of our growth strategy. The Acquisition enables growers to benefit from the comprehensive range of RLF and LiquaForce plant nutrition products that cover the entire plant growth cycle to enhance yields, improve crop health and achieve better financial returns. Furthermore, the Acquisition will considerably increase and diversify RLF's revenue, which has been mainly generated from Asia. Post-completion, the Company expects approximately 60% of its revenue to be generated from Australia, greatly diversifying and reducing the risk of relying on revenue from one geographical region. As part of our ongoing cost review and management process, RLF will look to consolidate group functions across both businesses, providing a stronger pathway to increased earnings. We look forward to completing the Acquisition and delivering value from this transformative acquisition to our stakeholders.

Summary of RLF AgTech's acquisition and outlook

RLF AgTech Ltd (ASX: $RLF) has undertaken a transformational acquisition of LiquaForce Pty Ltd's business assets, aiming to establish a complete plant nutrition solution for Australian agriculture and diversify its revenue sources. The acquisition is expected to be highly revenue and margin accretive, with material positive cash flow and EBITDA contributions to the company. Post-completion, RLF expects approximately 60% of its revenue to be generated from Australia, reducing the risk of relying on revenue from one geographical region. The company also aims to consolidate group functions across both businesses to provide a stronger pathway to increased earnings. With the acquisition funding secured through a new debt facility and equity financing, RLF is poised to capitalize on the synergistic opportunities and additional growth prospects unlocked by the acquisition, including immediate access to significant manufacturing capabilities and additional agricultural markets in Queensland.