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Agrify shares surged more than 20% in premarket trading.

Hardware and software cultivation solutions developer Agrify Corporation announced Monday it has acquired Precision Extraction Solutions and Cascade Sciences, two of the leading companies in the extraction, post-processing and testing equipment and solutions space, from Sinclair Scientific.

What Happened

Agrify acquired Precision and Cascade for $50 million.

$30 million were paid in cash and $20 million in value of Agrify common stock. The total purchase price may be adjusted to up to $65 million based on the performance of the Cascade and Precision businesses for the fiscal year ending December 31, 2021.

Why It Matters

With the addition of Precision and Cascade, Agrify has expanded its core business beyond cultivation by gaining instant access to complementary and highly attractive areas of the supply chain.

Precision and Cascade offer cutting-edge technologies and end-to-end service solutions for cannabis and hemp extraction and post-processing. These leading brands have collectively worked with more than 30 multi-state operators and more than1,000 cannabis and hemp customers.

Precision and Cascade expect to generate approximately $40 million in revenue in 2021 with positive EBITDA.