Nature's Miracle Holding Inc. Signs Non-Binding Letter of Intent to Acquire Pangea, which would Accelerate Growth Through Synergies

Rhea-AI Summary

Nature's Miracle Holding Inc. (NMHI) has signed a non-binding letter of intent to acquire Pangea Global Technologies, a LED lighting and technology solutions provider. The proposed acquisition involves 3,500,000 shares consideration and $2.0 Million in working capital.

Pangea, with manufacturing facilities in Mexico, operates through three brands: Visionaire Lighting, RapidGrow LED Technologies, and Pangea Software. The company reported $38.5 million in revenue and $2 million adjusted EBITDA for 2023. Pangea maintains 350,000 square feet of R&D and manufacturing space, serving major retailers like Walmart, Target, and government agencies including NASA through a network of 48 agencies with over 600 sales representatives.

The acquisition aims to create synergies by leveraging Pangea's U.S. distribution network and expertise in LED lighting technology, potentially strengthening Nature's Miracle's position in vertical farming infrastructure.

Positive

• Pangea's strong financial performance with $38.5M revenue and $2M EBITDA in 2023
• Access to extensive distribution network of 48 agencies and 600+ sales representatives
• Established relationships with major retailers (Walmart, Target, Best Buy)
• 350,000 sq ft of manufacturing facilities in Mexico offering vertical integration
• Potential cost reduction through supply chain optimization

Negative

• Non-binding LOI requires $2M working capital commitment
• Deal completion subject to definitive agreement execution
• Potential shareholder dilution from 3.5M share issuance

Insights

M&A Analyst

This non-binding LOI represents a strategic move in the vertical farming and LED lighting space. The proposed acquisition terms value Pangea at approximately $7 million (3.5M shares at current market value) plus $2M working capital injection. With Pangea's $38.5M revenue and $2M EBITDA, the implied valuation multiple of roughly 4.5x EBITDA appears quite favorable compared to industry standards of 8-12x.

The deal structure leverages stock-based consideration, preserving cash while offering potential upside through equity participation. The strategic rationale centers on vertical integration, with Pangea's Mexican manufacturing facilities and extensive U.S. distribution network (48 agencies, 600+ sales reps) providing immediate scale and operational synergies. The enterprise client portfolio including Walmart, Target and NASA adds significant credibility and growth potential.

However, investors should note this is non-binding and subject to definitive agreements. The $2M working capital requirement could strain NMHI's resources and integration risks exist despite clear strategic alignment.

Technology Industry Analyst

The potential integration of Pangea's SaaS platform for advanced lighting controls represents a significant technological advantage in the vertical farming space. Their 350,000 sq ft R&D and manufacturing capability in Mexico, combined with in-house production, provides important intellectual property and operational control. The software solutions deployed for major clients like Toyota demonstrate enterprise-grade capabilities.

The synergy potential extends beyond cost savings - the combined entity could leverage Pangea's lighting expertise and NMHI's vertical farming infrastructure to develop integrated smart farming solutions. This technological convergence could create competitive barriers and enable premium pricing. The established relationships with major retailers also provide a ready distribution channel for future innovations.

ONTARIO, Calif., Jan. 21, 2025 /PRNewswire/ -- Nature's Miracle Holding Inc. (OTC PINK: NMHI) ("Nature's Miracle" or the "Company"), a leader in vertical farming technology and infrastructure, today announced that on January 19, 2025, it has signed a non-binding letter of intent ("LOI") to acquire 100% of Pangea Global Technologies, Inc. ("Pangea"), a leading manufacturer of LED lighting and technology solutions provider. If completed, the acquisition is intended to create synergies and unlock growth opportunities by leveraging Pangea's distribution network in the U.S. and over two decades of experience in the Company's core business of LED lighting and technology.

Pursuant to the LOI, Nature's Miracle would provide a total consideration of 3,500,000 shares. Additionally, Nature's Miracle would agree to provide Pangea with $2.0 Million in working capital pursuant to this transaction. The LOI is a non-binding expression of the parties' mutual intent and does not constitute a legally enforceable obligation to consummate the proposed transaction. Any binding agreement will result only from the execution of definitive transaction documents subject to terms and conditions satisfactory to both parties.

Based in California and with manufacturing facilities in Mexico, Pangea delivers technology solutions and high-performance, specification grade LED lighting through its three brands: Visionaire Lighting, LLC, RapidGrow LED Technologies and Pangea Software Inc. Pangea reported audited revenues of $38.5 million and adjusted EBITDA of $2 million for 2023. With more than 350,000 square feet of research and development, testing, and manufacturing facility space in Mexico, Pangea is a vertically integrated operation that produces all of its products in-house. It also offers PANGEA SaaS platform, which allows for advanced lighting controls and energy management solutions. Pangea's sales network makes use of 48 agencies with over 600 sales representatives throughout the U.S.  Pangea's customers include well-known retailers such as Walmart, Target, Top Golf, Best Buy, and Lowe's, as well as government agencies such as NASA. Pangea's software solutions cater to clients such as Toyota, Vance Airforce Base, and Central Florida Express Authority.

Mr. James Li, Chairman and CEO of Nature's Miracle, commented, "We are extremely excited about the potential of this strategic acquisition, which aligns with our commitment to becoming a leader in LED lighting and vertical farming. By combining forces, we anticipate accelerated growth with a strengthened balance sheet, reduced costs, optimized supply chain, and broader product offerings. We are confident that the acquisition, when consummated, can significantly advance our leadership in vertical farming infrastructure and improve our shareholder value creation. We also expect to further explore strategic partnerships and M&A opportunities to facilitate our relisting effort with Nasdaq. We appreciate Pangea's efforts in developing cutting-edge lighting technologies and we look forward to working with Pangea's talented team to bring our shared vision of sustainable value creation to life."

Bryan Fried, CEO of Pangea, stated, "We believe the potential combination of Pangea with Nature's Miracle poses significant growth opportunities for both parties as it will promote synergies, reducing costs for our Mexico operations through an optimized supply chain. We are thrilled to join forces with Nature's Miracle to deliver enhanced value to our clients, improve our competitive advantages, and drive sustainable growth in the industry."

About Nature's Miracle Holding Inc.

Nature's Miracle (www.Nature-Miracle.com) is a growing agriculture technology company providing products and services to growers in the Controlled Environment Agriculture ("CEA") industry around the world. The company has recently launched EV and bitcoin businesses, all energy dependent as CEA.

About Pangea

PANGEA Global Technologies, Inc. is a leading manufacturer of LED lighting and technology solutions provider. PANGEA Global Technologies contains three brands: Visionaire Lighting, LLC, RapidGrow LED Technologies and Pangea Software Inc. With more than 350,000 square feet of research and development, testing, and manufacturing facility space in North America, PANGEA Global Technologies is a vertically integrated operation that produces all products in-house and is the provider of the PANGEA SaaS platform. Visionaire Lighting, established in 2000, has accumulated total sales more than $725 million since its inception. Visionaire specializes in LED lighting for commercial & industrial and public sector industries. RapidGrow LED Technologies produces and sells LED lighting to the emerging indoor farming industries. Pangea Software is a SaaS platform created with the idea that lighting is the most universally powered location in the outdoor world and therefore a logical place to deliver a software solution. The platform, at its core, allows for advanced lighting controls and energy management solutions. Pangea has developed integrations and features that include preventative maintenance alerts, energy monitoring and reduction tools, environmental data collection, camera integration and other features integrating artificial intelligence.

Forward-Looking Statements

The information in this press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "forecast," "intends," "may," "will," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release may include, for example: the intended use of proceeds from the offering; successful launch and implementation of Nature's Miracle's joint projects with manufacturers and other supply chain participants of steel, rubber and other materials; changes in Nature's Miracle's strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; Nature's Miracle's ability to develop and launch new products and services; Nature's Miracle's ability to successfully and efficiently integrate future expansion plans and opportunities; Nature's Miracle's ability to grow its business in a cost-effective manner; Nature's Miracle's product development timeline and estimated research and development costs; the implementation, market acceptance and success of Nature's Miracle's business model; developments and projections relating to Nature's Miracle's competitors and industry; and Nature's Miracle's approach and goals with respect to technology.

These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing views as of any subsequent date, and no obligation is undertaken to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include: the ability to maintain the listing of the Company's shares on Nasdaq; changes in applicable laws or regulations; the effects of the coronavirus (COVID-19) and any future outbreaks on Nature's Miracle's business; the ability to implement business plans, forecasts, and other expectations, and identify and realize additional opportunities; the risk of downturns and the possibility of rapid change in the highly competitive industry in which Nature's Miracle's operates; the risk that Nature's Miracle's and its current and future collaborators are unable to successfully develop and commercialize Nature's Miracle's products or services, or experience significant delays in doing so; the risk that the Company may never achieve or sustain profitability; the risk that the Company will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all; the risk that the Company experiences difficulties in managing its growth and expanding operations; the risk that third-party suppliers and manufacturers are not able to fully and timely meet their obligations; the risk that Nature's Miracle's is unable to secure or protect its intellectual property; the possibility that Nature's Miracle's may be adversely affected by other economic, business, and/or competitive factors; and other risks and uncertainties described in Nature's Miracle's filings from time to time with the SEC.

For more information, please contact:

Nature's Miracle Holding, Inc.
Chris Wang, CFO
Chris.Wang@nature-miracle.com 

Ascent Investors Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com

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SOURCE Nature's Miracle Holding Inc.

FAQ

What is the acquisition cost for NMHI's purchase of Pangea?

Nature's Miracle Holding Inc. will provide 3,500,000 shares as consideration and $2.0 Million in working capital for the acquisition of Pangea.

What was Pangea's revenue and EBITDA in 2023?

Pangea reported audited revenues of $38.5 million and adjusted EBITDA of $2 million for 2023.

How many sales representatives does Pangea have in its distribution network?

Pangea utilizes 48 agencies with over 600 sales representatives throughout the United States.

What major retailers are among Pangea's customers?

Pangea's customers include Walmart, Target, Top Golf, Best Buy, and Lowe's, as well as government agencies like NASA.

How will the Pangea acquisition benefit NMHI shareholders?

The acquisition is expected to accelerate growth through strengthened balance sheet, reduced costs, optimized supply chain, broader product offerings, and improved shareholder value creation.