Hydrofarm acquires IGE for $58M; preliminary Q3 sales ~$122.5M, raises FY2021 guidance

HYDROFARM HOLDINGS GROUP, INC.

Acquires Innovative Growers Equipment (IGE) for ~$58M (cash+stock); IGE expected $48M sales in 2021; ~7x EBITDA multiple.
New $125M term loan (LIBOR+5.5%, 1% floor, matures Oct 2028) funds cash portion of IGE and general corporate purposes.
Preliminary Q3 net sales $121-124M (+27% YoY), Adj EBITDA $14.4-16.4M (+108% YoY), net income $13.3-18.3M.
Updated FY2021 outlook: net sales $470-490M (37-43% growth), Adj EBITDA $47-53M (10-11% of sales).
Cites headwinds from cannabis oversupply in CA/Canada; expects improvement as new legal states ramp up.

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