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Village Farms International, Inc. (NASDAQ:VFF), currently valued at $115 million in market capitalization, announced on Monday a new strategic partnership, entering into a Framework Agreement with Vanguard Food GP LLC, Vanguard Food LP, and other entities. The agreement, dated May 12, 2025, outlines the contribution of Village Farms’ produce business assets to Vanguard, alongside a $55 million investment from initial investors Kennedy Lewis (JO:LEWJ) Capital Partners (WA:CPAP) Master Fund II LP and Sweat Equities SPV LLC. The news has contributed to the stock’s impressive 40% gain over the past week, according to InvestingPro data.
Under the terms of the Framework Agreement, Village Farms will receive $40 million, with $5 million held in escrow, and a 37.9% equity ownership in Vanguard Food LP. The initial investors will be granted a 62.1% equity ownership. Additionally, Village Farms will have no further cash obligations to Vanguard and will maintain preemptive rights to preserve its ownership stake. InvestingPro analysis indicates the company is currently trading below its Fair Value, with a price-to-book ratio of just 0.42 and liquid assets exceeding short-term obligations with a current ratio of 1.92.
The deal is expected to close in the second quarter of 2025, subject to customary closing conditions. Upon completion, several agreements will be enacted, including an Amended and Restated Limited Partnership Agreement for Vanguard Food LP and a Sales, Marketing & Distribution Agreement.
Charlie Sweat, founder of Sweat, is set to become Chairman of Vanguard’s Board of Managers. Michael A. DeGiglio, founder, President, and CEO of Village Farms, will join the Board and serve as Vanguard’s Interim CEO until a permanent CEO is appointed. Steve Ruffini, CFO of Village Farms, will also join the Board.
Post-closing, Village Farms will retain ownership of its Monahans and Delta 1 greenhouse facilities, entering into a multi-year supply agreement with Vanguard for produce from Delta and leasing the Marfa I greenhouse facility to Vanguard. The Marfa I facility has potential for expansion, with adjacent land available for future growth.
This strategic partnership aims to strengthen Village Farms’ position in the produce sector while enabling Vanguard to establish itself as an independent entity with the support of Village Farms through a transition services agreement. The detailed terms of the Framework Agreement will be disclosed in a future amendment to this Current Report on Form 8-K. For deeper insights into Village Farms’ financial health and future prospects, including 10+ additional ProTips and comprehensive valuation metrics, investors can access the full company analysis through InvestingPro’s detailed research reports, available for over 1,400 US-listed companies.
This news is based on a press release statement.
In other recent news, Village Farms International reported its fourth-quarter earnings for 2024, showcasing an 11% increase in revenue year-over-year, reaching $83 million. However, the company reported a net loss of $0.08 per share, missing the expected EPS of -$0.02. In financial restructuring efforts, Village Farms successfully refinanced its Canadian Cannabis Term Loans, consolidating previous loans into a single facility with a reduced interest rate of below 8% and an extended maturity date of February 2028. Additionally, the company renegotiated its credit agreement with Farm Credit Canada, maintaining a variable interest rate under 8% and extending the maturity to May 2027, which is expected to support its strategic growth goals.
Village Farms also received a 180-day extension from Nasdaq to comply with the minimum bid price requirement, giving it until October 2025 to meet the criteria. As part of its international expansion, the company is focused on increasing its medicinal cannabis exports and has begun sales in New Zealand. The company’s subsidiary, Pure Sunfarms, continues to be a prominent player in the Canadian cannabis market, contributing significantly to the company’s overall performance. Furthermore, Village Farms is advancing its clean energy initiatives through a partnership with Terreva Renewables, aiming to reduce greenhouse gas emissions in Vancouver. These developments reflect Village Farms’ ongoing efforts to strengthen its financial position and expand its market presence.
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