U.S. specialty hydroponic and organic garden center operator GrowGeneration Corp. (NAS:GRWG) said Wednesday it has terminated its acquisition agreement with HGS Hydro in a mutual decision, but that the two companies will continue to develop a working relationship. "This was a difficult decision regarding the HGS Hydro acquisition, but following appropriate due diligence and capital allocation analysis, we decided to mutually terminate the acquisition," CEO Darren Lampert said in a statement. The company updated its third-quarter guidance to reflect the move and said it now expects revenue to range from $114 million to $116 million, below the FactSet consensus of $123 million. For the full year, it expects revenue to range from $440 million to $452 million, also below the $471.6 million FactSet consensus. The HGS deal was expected to add about $20 million to full-year revenue. GrowGeneration said it has acquired All Seasons Gardening, an indoor-outdoor garden supply center that specializes in hydroponics systems, lighting and nutrients. Terms were not disclosed, but the deal will add 63 stores in 13 states to its network. Shares slid 4% in premarket trade, and are down 41% in the year to date, while the AdvisorShares Pure US Cannabis ETF (PSE:MSOS) has fallen 18% and the S&P 500 (S&P:SPX) has gained 16%.
Oct. 13, 2021, 8:16 a.m. EDT