Novus Capital Corp., an Indianapolis-based publicly traded company led by former Brightpoint Inc. CEO Bob Laikin, has forged an agreement with a Kentucky-based ag-tech firm that essentially will combine the two companies.
Novus and Lexington, Kentucky-based AppHarvest, a developer and operator of large-scale and high-tech indoor farms, announced the “business combination” agreement on Tuesday, which will result in AppHarvest becoming a public company.
Novus is a so-called “blank check company,” an entity that exists to acquire one or more businesses and merge with them as a way to take those companies public. It raised $100 million in a sale of 10 million shares in May and then set out to find an acquisition target.
The boards of Novus Capital and AppHarvest have unanimously approved the transaction, according to a press release announcing the deal. It’s expected to close late in the fourth quarter of 2020 or early in the first quarter of 2021.
When the deal closes, the combined company will be named AppHarvest and is expected to remain listed on Nasdaq under a new ticker symbol. The combined company will be led by Jonathan Webb, AppHarvest’s founder and CEO.
The transaction will provide $475 million of gross proceeds to AppHarvest, including $375 million fully committed common stock PIPE (private investment in public equity) at $10 per share anchored by existing and new investors.
AppHarvest operates a 60-acre controlled environment agriculture facility in Morehead, Kentucky—one of the largest high-tech greenhouses in the world—and is planning more indoor farm projects, company officials said.
“AppHarvest is a unique and compelling investment opportunity that is redefining American agriculture by improving access for all to fresh non-GMO produce, growing more with fewer resources, and creating an AgTech hub from within Appalachia,” Laikin said in a media statement.
“With significant tailwinds from heightened investor focus on ESG initiatives and the secular shift to plant-based foods, we believe AppHarvest is well-positioned to execute on its strategy for rapid growth and value creation,” Laikin said.
Novus is the brainchild of Laikin, who has served as the company’s chairman, and Larry Paulson, who has held executive posts at Brightpoint, Qualcomm and Nokia.
Laikin founded Brightpoint, a distributor of wireless mobile devices, in 1989 and grew annual sales to more than $5 billion before selling it to Ingram Micro for $840 million in cash in 2012.
The two had recently left their jobs and were having lunch in January when the subject of blank-check companies, also known as special purpose acquisition companies, came up.
Laikin and Paulson told IBJ in June that if they were able to do a deal with Novus and deliver a solid return to investors, it wouldn’t be their last blank-check company.
Laikin told IBJ on Tuesday that he will become a board member of AppHarvest.
The founders of Novus also include Brad Bostic, CEO of Hc1, an Indianapolis-based maker of data analytics software for health care organizations, and former Indiana Pacer player and serial investor Jeff Foster.
When it launched in March, Novus Capital Corp. had no revenue or paid employees. Laikin explained to IBJ in June that if more capital was needed to make an acquisition, the company would acquire funds using what’s called a “private investment in public equity”—or a PIPE—deal, which involves selling publicly traded common shares or some form of preferred stock or convertible security to private investors. It is an allocation of shares in a public company, not through a public offering in a stock exchange. The PIPE deal takes place at the same time the merger closes.