- African Agriculture Inc. (“AAGR” or the “Company”) has entered
into a merger agreement with 10X Capital Venture Acquisition Corp.
II (Nasdaq: VCXA).
- AAGR is led by a management team and board of directors with
deep roots and a track record of success on the African
continent.
- AAGR manages extensive farmland in West Africa, including an
alfalfa farm it currently operates on approximately 750 acres of a
total of 62,000 acres of dedicated farmland in Senegal, with
approximately 500,000 acres of farmland under contract in
Niger.
- Alfalfa was a $21 billion global market in 2021. Global prices
of alfalfa have increased by approximately 50% since 2021, driven
in part by rising demand for proteins from emerging economies,
impacts from the onset of the war in Ukraine and droughts in
California and Europe.
- Alfalfa is a critical input for the dairy and livestock
industries. With the goal of producing alfalfa in Africa at a
larger scale and significantly lower cost than in other global
markets, AAGR’s mission is to provide food security to farmers and
consumers globally, ensuring access to feedstock, dairy and
meat.
- In addition to its primary crop, alfalfa, AAGR intends to
promote sustainability and generate significant carbon credits by
leveraging Western farming technology and participating in the
Great Green Wall project in Niger.
- Business combination based on a pre-money enterprise value for
AAGR of $450 million.
- 10X II and African Agriculture have secured a $100 million
equity line of credit facility from an affiliate of Yorkville
Advisors.
- 10X II has secured an up to $100 million backstop commitment to
help offset the impact of potential shareholder redemptions from a
client of Cohen & Company Financial Management, LLC
(“Cohen”).
- Merger expected to be completed by 1H 2023; combined company
expected to be listed on NASDAQ.
African Agriculture, Inc. (“AAGR” or the “Company”), a global
food security company operating a commercial-scale alfalfa farm on
the African continent to meet the growing demand for agricultural
commodities globally, and 10X Capital Venture Acquisition Corp. II
(Nasdaq: VCXA; Warrants VCXAW) (“10X II”), a special purpose
acquisition company (“SPAC”) sponsored by 10X Capital, today
announced the execution of a definitive Business Combination
Agreement. Upon closing of the transaction, which values AAGR at an
estimated enterprise value of $450 million, the combined
company is expected to list its shares on the NASDAQ stock
market.
Through the transaction, AAGR will receive
additional capital for expanding its current and planned farming
operations. 10X II and AAGR have secured a $100 million
standby equity financing facility from YA II PN, LTD., an affiliate
of Yorkville Advisors. 10X II has also entered into a forward
purchase agreement with a client of Cohen, whereby such party has
agreed to purchase, if applicable, shares of 10X II’s Class A
ordinary shares prior to the closing of the business combination
for a purchase price of up to $100 million in the event of
potential redemptions by 10X II’s shareholders. Entities and funds
managed by Cohen own equity interests in 10X II’s Sponsor.
AAGR’s lead investor and majority shareholder is
Global Commodities and Investments Limited, a natural
resources-focused investment firm owned by Switzerland-based
entrepreneur Frank Timis, who has a track record of success in West
African mining and infrastructure, including one of the largest
natural gas discoveries on the Atlantic margin in Senegal’s
history.
The combined public company will be led by
current AAGR CEO Alan Kessler. Mr. Kessler is South African-born
and a graduate of the University of Pennsylvania and Columbia
Business School. He has served as an investment banker and research
analyst at Morgan Stanley and Goldman Sachs, and later led IPOs for
multiple African commodity companies. Mr. Kessler said, “Becoming a
U.S. listed publicly traded company creates a significant
opportunity for African Agriculture. The enhanced access to capital
will allow us to continue to scale and grow our footprint to become
a leading producer of alfalfa globally and grow our platform to
further solidify our leading position in the field of protein
security. Our access to abundant water and flexible logistics gives
us the tools to restore the historical European breadbasket in the
Senegal-Mauritania river valley, with further expansion potential
into carbon credits with our sustainability-focused Great Green
Wall project on approximately 500,000 acres in Niger.”
Partnership with 10X II
Hans Thomas, CEO of 10X Capital, commented, “The
war in Ukraine this year and the drought we’ve been experiencing in
California shine a spotlight on one of the biggest problems we have
in the world: food security. With supply chains disrupted, grocery
prices soaring, and many people globally facing acute shortages of
grain, dairy and meat, we believe Alan and the AAGR team will
provide farmers and consumers with real food security at a time of
significant population and demand growth, via a valuable, simple
solution,”
Mr. Thomas continued, “What they’ve achieved in
their initial phase of farm development is already remarkable, and
according to the World Bank, Africa contains over 60% of the
world’s arable land, so in addition to the over half a million
acres they currently have access to, I believe there is a direct
line of sight to achieving tremendous scale in production. The crop
they are initially producing, alfalfa, is one that often has high
yields and is in high demand by farmers and consumers alike. They
are operating in one of the fastest growing regions in the world
with a strong need for food security. With its focus on
sustainability and other ESG goals, AAGR expects to generate a
positive economic impact by fostering higher crop productivity and
generating carbon credits.”
Differentiated Platform
Alfalfa is one of the most critical and valuable
agricultural commodities in the world, and is one of the highest
yielding vegetation-based protein crops. The estimated market was
$21 billion in 2021, and further estimated to increase to $35
billion by 2028 in a consensus of reports from Fortune Business
Insights. Alfalfa is a key feed input for the dairy and livestock
industries, and the price of the commodity has increased
significantly within the last three years.
AAGR has over 62,000 acres of farmland in
Senegal which are dedicated to current and planned alfalfa
production, surrounded by abundant water resources including a
43,000 acre freshwater lake and a 2 million cubic foot per day
river. AAGR estimates its cost per acre foot is an order of
magnitude lower than the equivalent water price in California which
offers a material production cost advantage and, when coupled with
higher crop yields and shorter transportation distances, provides
AAGR with a highly competitive and strategic position. AAGR
operates a 750 acre alfalfa project on its initial farmland in
Senegal, with room to expand alfalfa production across its 62,000
acres and realize large scale efficiencies. By comparison, the
average farm in the United States is less than 445 acres. The
Company has performed multiple cuts in 2022, with the harvest being
sold locally in Senegal, and is actively preparing its facilities
and product for export markets.
In addition to Senegal, the Company has signed
agreements for approximately 500,000 acres of arable farmland in
Niger. In the West African region, AAGR is strategically placed to
take advantage of a growing market, conveniently located near its
key consumption markets.
AAGR is actively seeking additional farmland
across the Senegal-Mauritania river valley and the rest of the
African continent, especially in the areas of primary production of
cattle feed.
Logistics
Expanded port access within reach of the alfalfa
farm greatly expands AAGR’s ability to export product, and aligns
the pricing of its alfalfa products to global pricing, especially
in the area of the member states of the Cooperation Council for the
Arab States of the Gulf. The LFT AAGR farm is located less than 85
km from the city of Saint Louis in Senegal, which is situated on
the Atlantic coast of the country and includes port facilities, and
approximately 300 km from the Port of Dakar, which is managed by
Dubai Ports World.
Food Security
Global food security is increasingly in focus.
Several stressors on the food supply chain ranging from
urbanization, to soil degradation, water insecurity and fragile
logistics systems, require diversification of sources of feedstock
for farm animals and shorter distances to offtake markets. AAGR
believes it is uniquely situation to become a primary producer of a
key strategic crop and minimize of supply chain disruptions, which
if achieved, have large value creation potential.
Impactful Nature of Business
Operations
By virtue of its geographical proximity to its
consumption markets, the Company is greatly reducing the global
carbon footprint of alfalfa. The nautical distance from Dakar to
the Persian Gulf is approximately half the distance from the
western United States to the Persian Gulf (7,346 nautical
miles vs 14,602 nm). Protein access, nutrition, employment,
sustainable irrigation, fertilizer and power programs further
enhance the Company’s aspiration to adhere to every one of the
seventeen United Nations Sustainable Development Goals. Together
with its academic partner, Louisiana State University’s Agcenter,
AAGR is further exploring mechanisms to reduce scope 3 methane
emissions in cattle via feed based techniques.
Experienced Management Team
In addition to CEO Alan Kessler, the African
Agriculture management team has extensive experience in global
markets and operating businesses at scale in Africa.
Harry Green, AAGR’s CFO, brings decades of
multi-industry experience, including with various private equity
and hedge fund platforms. Mr. Green began his career at Donaldson,
Lufkin and Jenrette (DLJ). Mr. Green has an MBA from the Wharton
School of Business. Mr. Green was born and raised in South
Africa.
AAGR’s team on the ground in Africa is
experienced in operating at scale on the continent, with decades of
industry experience in the region. Gora Seck, the President of
AAGR’s Senegal operations has decades of experience in Senegal.
Edward Meiring, AAGR’s Head of Farming, brings over 40 years
of multigenerational experience in the farming sector as an
agricultural specialist focused on quality control for large
multinational exports. Kiran Shylaga, AAGR’s Chief Technical
Officer, brings over 15 years of experience in the field of
plant tissue culture, specializing in horticulture and floriculture
crops, aligning with the greenfield development of the Ethiopian
Sugar Institute. Elad Harzahav, AAGR’s Head of Logistics, and
Technology Integration, brings more than 20 years of military
experience and expertise, serving at the highest levels of Israel’s
security and intelligence and responsible for safeguarding both
internal and external state security. Javier Orellana, AAGR’s Chief
Operating Officer, Senegal Operations, brings operational
experience in agronomy from Bayer CropScience.
AAGR’s board of directors includes Orim Graves,
CFA, Executive Director of the National Association of Securities
Professionals and former Chief Investment Officer for the City of
Philadelphia Board of Pensions and Retirement; Russell Read, former
Chief Investment Officer of CalPERS, the Alaska Permanent Fund, and
the Gulf Investment Corporation; Ambassador Modest Jonathan Mero,
the outgoing Ambassador of the United Republic of Tanzania to the
United Nations; Daphne Michelle Titus, a career member of the
United States Department of State Senior Foreign Service and one of
the State Department’s premier Africanists; and Ambassador (ret)
Bisa Williams, Senior Fellow at Yale University’s Jackson Institute
for Global Affairs and former U.S. Ambassador to Niger under
President Barack Obama.
Key Transaction Terms
The Boards of Directors of each of the Company
and 10X II has unanimously approved the proposed merger, which is
expected to be completed in the first half of 2023, subject to
regulatory approval, the approval of the proposed merger by the
Company’s stockholders and 10X II’s shareholders and the
satisfaction or waiver of other customary closing conditions.
Financial and Legal
Advisors
Canaccord Genuity is serving as a financial
advisor to 10X II on this transaction. Latham & Watkins
LLP is legal counsel to 10X II. Morrison Cohen LLP is legal counsel
to the Company.
About African Agriculture
African Agriculture, Inc. is a global food
security company based in New York, which currently operates an
alfalfa farm in Senegal and owned additional arable land on the
African continent to meet the growing demand for agricultural
commodities globally. For more information, visit
https://africanagriculture.com/our-focus.
About 10X Capital
10X Capital is a venture capital and investment
firm at the nexus of Wall Street and Silicon Valley, aligning
institutional capital with high growth ventures, and promoting
Diversity, Equity and Inclusion. 10X Capital invests across the
capital structure, with a focus on companies using technology to
disrupt major industries, including finance, healthcare, natural
resources, transportation, infrastructure and real estate. For more
information, visit https://www.10XCapital.com/.
10X Capital Venture Acquisition Corp II
(Nasdaq: $VCXA) is a special purpose acquisition company
sponsored by 10X Capital, focused on identifying high growth
businesses domestically and abroad and bringing them to the public
markets. For more information, visit https://www.10XSPAC.com/.
Additional Information
In connection with the proposed transaction, the
Company will become the wholly-owned subsidiary of 10X II and 10X
II will be renamed African Agriculture Holdings Inc. as of the
closing of the proposed transaction. 10X II is expected to file a
registration statement on Form S-4 (the
“Form S-4”) with the U.S. Securities and Exchange
Commission (“SEC”) that will include a proxy statement and
prospectus of 10X II. 10X and the Company urge investors,
shareholders and other interested persons to read, when available,
the Form S-4, including the preliminary proxy
statement/prospectus and amendments thereto and the definitive
proxy statement/prospectus and documents incorporated by reference
therein, as well as other documents filed with the SEC in
connection with the proposed transaction, as these materials will
contain important information about the Company, 10X II and the
proposed transaction. Such persons can also read 10X II’s Annual
Report on Form 10-K for the fiscal year ended
December 31, 2021, for a description of the security holdings
of 10X II’s officers and directors and their respective interests
as security holders in the consummation of the proposed
transaction. When available, the definitive proxy
statement/prospectus will be mailed to 10X II’s shareholders.
Shareholders will also be able to obtain copies of such documents
and all other relevant documents filed or that will be filed with
the SEC by 10X II, without charge, once available, at the SEC’s
website at www.sec.gov. Copies of the proxy
statement/prospectus can be obtained, when available, without
charge, from 10X II’s
website https://www.10xspac.com/. Before making
any voting decision, investors and security holders of 10X II and
the Company, and other interested parties, are urged to read the
registration statement, the proxy statement/prospectus and all
other relevant documents filed or that will be filed with the SEC
in connection with the proposed business combination as they become
available because they will contain important information about the
proposed business combination.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. We intend such forward-looking statements to be
covered by the safe harbour provisions for forward-looking
statements contained in Section 27A of the Securities Act of 1933,
as amended (the “Securities Act”) and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). All
statements contained in this press release other than statements of
historical fact, including without limitation, statements regarding
the proposed business combination between 10X II and the Company,
the benefits of the proposed business combination, the anticipated
timing of the proposed business combination, the services offered
by the Company and the markets in which the Company intends to
operate, business strategies, industry environment, potential
growth opportunities, the effects of regulations and 10X II’s or
the Company’s projected future results. Words such as “expect”,
“estimate”, “project”, “budget”, “forecast”, “anticipate”,
“intend”, “plan”, “may”, “will”, “could”, “should”, “believes”,
“predicts”, “potential”, “continue”, and similar expressions
(including the negative versions of such words or expressions) are
intended to identify forward-looking statements, though not all
forward-looking statements use these words or expressions.
Forward-looking statements are predictions,
projections and other statements about future events that are based
on current expectations and assumptions and, as a result, are
neither promises nor guarantees, but involve known and unknown
risks, uncertainties and other important factors that may cause
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by forward-looking statements, including but
not limited to: (i) the risk that the proposed business
combination may not be completed in a timely manner or at all,
which may adversely affect the price of 10X II’s securities;
(ii) the risk that the proposed business combination may not
be completed by 10X II’s business combination deadline and the
potential failure to obtain an extension of the business
combination deadline sought by 10X II; (iii) the failure to
satisfy the conditions to the consummation of the proposed business
combination, including the approval of the proposed business
combination by the shareholders of 10X II and the receipt of
certain governmental and regulatory approvals; (iv) the effect
of the announcement or pendency of the proposed business
combination on the Company’s business relationships, performance,
and business generally; (v) risks that the proposed business
combination disrupts current plans of the Company and potential
difficulties in the Company employee retention as a result of the
proposed business combination; (vi) the outcome of any legal
proceedings that may be instituted against 10X II or the Company
related to the agreement and plan of merger or the proposed
business combination; (vii) the ability to maintain the
listing of 10X II’s securities on Nasdaq; (viii) the price of
10X II’s securities, including volatility resulting from changes in
the competitive and highly regulated industries in which the
Company operates, variations in performance across competitors,
changes in laws and regulations affecting the Company’s business
and changes in the combined capital structure; (ix) the
ability to implement business plans, forecasts, and other
expectations after the completion of the proposed business
combination, and identify and realize additional opportunities; and
(x) the impact of fluctuations in agricultural commodity prices and
related costs, as well as global demand for the Company’s products
based on end-demand for crops, supply and quality issues, or any
other reason; (xi) the Company’s reliance upon irrigation systems,
public water sources and other resources subject to regulatory
control by foreign governments; (xii) the international nature of
the Company’s proposed business, including adverse trade policies,
changes in laws, inflation, exchange controls, and civil or
political instability; and (xiii) risks related to adverse weather
conditions, including as a result of climate change, affecting the
quality and price of agricultural products. The foregoing list of
factors is not exhaustive. You should carefully consider the
foregoing factors and the other risks and uncertainties described
in 10X II’s final proxy statement/prospectus to be contained in the
Form S-4 registration statement, including those under
“Risk Factors” therein, 10X II’s Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q and
other documents filed by 10X II from time to time with the SEC.
These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and 10X II and the Company assume no obligation and,
except as required by law, do not intend to update or revise these
forward-looking statements, whether as a result of new information,
future events, or otherwise. Neither 10X II nor the Company gives
any assurance that either 10X II or the Company will achieve its
expectations.
Participants in the
Solicitation
10X II, the Company and their respective
directors, executive officers and other members of their management
and employees, under SEC rules, may be deemed to be participants in
the solicitation of proxies of 10X II’s shareholders in connection
with the proposed transaction. Investors and security holders may
obtain more detailed information regarding the names, affiliations
and interests of 10X II’s directors and executive officers in 10X
II’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2021, which was filed with the SEC on
March 30, 2022. Information regarding the persons who may,
under SEC rules, be deemed participants in the solicitation of
proxies of 10X II’s shareholders in connection with the proposed
transaction will be set forth in the proxy statement/prospectus for
the proposed transaction when available. Information concerning the
interests of 10X II’s participants in the solicitation, which may,
in some cases, be different than those of 10X II’s equity holders
generally, will be set forth in the proxy statement/prospectus
relating to the proposed transaction when it becomes available.
No Offer or Solicitation
This press release is not a proxy statement or
solicitation of a proxy, consent or authorization with respect to
any securities or in respect of the potential transaction and shall
not constitute an offer to sell or a solicitation of an offer to
buy the securities of 10X II, the Company or the combined company,
nor shall there be any sale of any such securities in any state or
jurisdiction in which such offer, solicitation, or sale would be
unlawful prior to registration or qualification under the
securities laws of such state or jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of the Securities Act.
CONTACTS:
For African Agriculture:
Investors: ak@africanagriculture.com
Media: Maxine Gordon,
mg@africanagriculture.com
For 10X Capital:
Investors: IR@10xcapital.com
SPAC Website: www.10xspac.com
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