AgriFORCE provides sustainable and holistic agriculture solutions for the food market, focusing on intellectual property. CEO Ingo Mueller speaks with Acuris Capital Intelligence about sustainable farming, its global influence and the company’s M&A strategy.

Interview by Sydney Halleman

Q. What’s driving interest in sustainable agriculture?

COVID-19 really heightened consumer awareness of the challenges facing agriculture as well as the impact of agriculture on climate. Suddenly, store shelves were empty. I think consumers want food that's fresh, local and sustainably produced. With climate change, people are starting to realize that arable land is diminishing. At the same time, populations are increasing. All of these are catalysts driving change. We believe we can address this situation by delivering next-generation food and plant products using advanced agriculture technology solutions.

Everything we do is focused on intellectual property to address more sustainable ways to produce food, deliver things that are more nutritious and drive profitability and margins.

Q. What does the sustainable agriculture market look like in the US?

The agriculture industry is extremely fragmented, no matter where you go in the world. There is a tremendous amount of innovation going on in North America, particularly in the US, but it is far behind Europe. There are a lot of companies in the US capital markets accessing huge amounts of capital for vertical growth and they're all purporting to have amazing innovation and technology. But they have failed to say that a lot of it is off the shelf from Europe, because they’ve been doing vertical farming for 15 years.

There are disparate parts that are cobbled together by investors who are eager to fund the companies, whether that's the farmers themselves or investors who see a pure-play agriculture opportunity. You end up with facilities or operations that don't achieve the outcomes they had hoped for.

Q. You recently acquired several targets—what’s your current M&A outlook?

We have a four-pillar strategy: lighting and climate control; automation and artificial intelligence; fertigation and nutrients; and micropropagation and genetics. I have set a goal of acquiring US$100 million in top-line revenue with a 10%-15% EBITDA margin, and we are pushing very hard to achieve that this fiscal year. I've set another goal for the following year to achieve an equal US$100 million in top-line revenue.

Most of these companies are privately owned. Many are generational family businesses. In some instances, there's a willingness to sell because there's no succession plan in place. Others are less keen to do so.

Q. What’s your sweet spot for acquisitions?

The typical sweet spot is between US$25 million and US$50 million in top-line revenue. In agriculture technology, that's a pretty big number. We’re looking for top-three businesses unless a company has unique intellectual property or perspective. Our focus is finding cornerstone companies in our platform and focusing on size or critical mass.

However, as we move into year two and three of our M&A program, we'll look for complementary assets and smaller-sized businesses that have innovated something new and interesting but haven't developed a commercial scale.

A bit of background: Ingo Mueller is the CEO of AgriFORCE Solutions, headquartered in Vancouver, British Columbia. Its solutions include consulting and intellectual property that looks to optimize crops and food cultivation. 

This interview has been edited for clarity and length.