Leading specialty retail hydroponic and organic gardening centers operator GrowGeneration Corp. (GRWG) announced that it has signed an asset purchase agreement to acquire HGS Hydro, one of the largest chains of hydroponic garden centers. The terms of the deal have not been disclosed so far.
Following the news, shares of the company jumped 5.6% in Wednesday’s trading session. However, it pared its gains by about 1.2% to close at $41.40 in the extended trading session.
With this buyout, GrowGeneration will further solidify its position as a leading operator of specialty hydroponic and organic garden centers. Notably, HGS Hydro reported revenues of about $50 million in 2020. Post the buyout, HGS Hydro’s six stores across Michigan will become a part of GrowGeneration.
The CEO of GrowGeneration, Darren Lampert, said, “We look forward to building on HGS Hydro’s experience as we continue to expand our commercial footprint. This acquisition represents our continued focus on purchasing ‘best of breed’ hydroponic operations in the U.S. and strengthening our management team with seasoned veterans from our industry.” (See GrowGeneration stock chart on TipRanks)
Recently, Oppenheimer analyst Brian Nagel reiterated a Buy rating on the stock with a price target of $60. The analyst’s price target implies upside potential of 43.1% from current levels.
Consensus among analysts is a Strong Buy based on 6 unanimous Buys. The average GrowGeneration price target of $57.83 implies upside potential of 38% from current levels.
GrowGeneration scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained 392% over the past year.
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