GrowGeneration Corp. (NASDAQ: GRWG) increased its offering from the recently announced $125 million to $150 million and priced 5,000,000 shares of its common stock at $30.00 per share. GrowGen has also granted the underwriters a 30-day option to purchase up to an additional 750,000 shares of common stock offered in the public market. The company said it expects to close the Offering on or about December 11, 2020.
GrowGen shares fell on the news of the offering on Tuesday and were selling off again in early trading as investors are concerned about dilution. Shares were lately selling near $32, off of the company’s 52-week high of $37.
The company said it intends to use the net proceeds from this offering primarily to expand its network of hydroponic/garden centers through organic growth and acquisitions and for general corporate purposes. Since 2014, GrowGen has acquired 34 stores and opened 16 new stores. The company said it plans to continue to pursue acquisitions going forward. “We actively evaluate and pursue acquisitions on an ongoing basis, and are focusing on Ohio, Illinois, Pennsylvania, New York, New Jersey, Massachusetts, and Missouri as new markets where we plan to open new operations,” it said in the new prospectus.
This new deal follows the announcement in June when the company priced an underwritten public offering of 7,500,000 shares of its common stock at $5.60 per share. At the time, GrowGen said it expected the gross proceeds to be roughly $42 million, before deducting the underwriting discount and other estimated offering expenses. The deal was upsized from the previously announced offering size of $35 million of common stock and is expected to close on July 2. The underwriters had a 30-day option to purchase up to an additional 1,125,000 shares of common stock offered in the public market.
According to Yahoo Finance, eight analysts are covering the stock and all have a buy rating. The average target price is $29.80. The average revenue estimate for the current quarter is $58 million, an increase of 131% over last year’s sales for the same time period.