Benzinga | Jul 28, 2021 11:06AM EDT

GrowGeneration To Buy HGS Hydro US's Third-Largest Hydroponics Chain, Expanding Michigan Footprint

Hydroponics Innovator GrowGeneration Corp. (NASDAQ: GRWG) reported Wednesday it will acquire HGS Hydro, the third-largest chain of hydroponic garden centers in the U.S. for an undisclosed price.

HGS Hydro, founded in 2015, owns and operates six stores in Michigan with plans to open a seventh store in the fall. Last year, it had $50 million in revenue.

With this transaction, which is projected to close prior to the end of the fiscal year 2021, GrowGen will run 14 hydroponic garden centers in Michigan and 65 stores in total. New locations are in Shelby Township, Southfield, Sterling Heights, Hazel Park, Walled Lake, Albion and Imlay City, Michigan.

"We are excited to add HGS Hydro to our portfolio of stores before year-end, with its impressive leadership and commercial team," Darren Lampert, GrowGen's CEO stated. "The addition of HGS Hydro will propel Michigan to GrowGen's second-largest state behind California. Michigan is one of the fastest-growing states for medical and recreational cannabis sales. 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."

HGS Hydro's CEO Rocky Shaeena added that the transaction will help GrowGen cement its position as the biggest chain of hydroponic garden centers in the U.S.

"As one of the pioneers of our industry, we are excited to bring our years of experience, insight, and relationships to the GrowGen team to assist in the Company's continued growth and success," Shaeena said.

Price Action

GrowGen's shares were trading 5.16% higher at $41.75 per share at the time of writing Wednesday midday.

Photo: Courtesy of GrowGen