Beleaguered ag-tech firm Farmers Edge is considering an offer to buy back its shares for pennies on the dollar, it announced in a Nov. 16 news release.
A non-binding proposal from majority shareholder Fairfax Financial Holdings Limited would see Fairfax acquire all common shares the company doesn’t already own at 25 cents per share.
Farmers Edge said it has formed a committee of independent directors to evaluate the proposal and “explore potential alternatives, including maintaining the status quo.”
Founded in 2005, Farmers Edge made its initial public offering in March 2021, issuing just over 7.35 million shares at $17 apiece. Former CEO Wade Barnes said the resulting $125 million would be used to scale up.
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He said most of the venture capital raised in previous years had been converted to shares, which gave the company, “a really clean balance sheet and lots of dry powder to go out and grow the business.”
Instead, Farmers Edge struggled for traction, reporting disappointing fourth quarter results and that Barnes would step down as CEO.
Money woes continued into 2023, with declining farmer enrolment in digital agronomy tools and farmer backlash around its Smart Carbon program. Designed to use farm data to create saleable carbon credits for farmers, it struggled to pay out as it couldn’t find buyers for the credits.
In August, Farmers Edge announced plans to lay off 20 per cent of its workforce. Financial documents showed it had also shuttered its Australian operation.
At the end of the third quarter, the company showed a net loss of $55.1 million.
A Farmers Edge representative said they were unable to provide more information on the proposal or Farmers Edge’s financial situation at this time.
