MOREHEAD, Ky., (WTVQ/Press Release) — Start-up ag-tech company AppHarvest announced Monday it has purchased the Morehead, Ky. controlled environment agriculture facility and the property on which it is located from Equilibrium, a sustainability investment firm, for $125 million.
Equilibrium had worked in conjunction with AppHarvest to acquire the property and funded construction of the facility to lease to AppHarvest.
“The purchase of our first CEA facility allows us to reduce our operating costs by eliminating the previous lease expense and creates an opportunity to leverage a portion of this asset with low-interest debt that will create a positive return on equity for investors. As a testament to its climate resilience, our Morehead farm just set a performance record for harvesting, even as many other operators suffered weather-related challenges,” said AppHarvest President David Lee.
The AppHarvest team in Morehead exceeded a new performance threshold for the facility, harvesting more than 120,000 pounds of tomatoes in a single day during the week of February 22 on the 30 acres currently planted with Beefsteak tomatoes.
The company expects to begin harvesting the first crop of an additional 30 acres of the Tomatoes on the Vine variety early in the second quarter, which will further expand volume.
“I applaud the hardworking team who really stepped up last week to accelerate our progress to provide customers with nutritious, chemical pesticide-free, affordable U.S.-grown tomatoes that can be delivered much more efficiently to nearly 70 percent of the country’s population, which is within a day’s drive of our farm here in Appalachia,” said AppHarvest Founder & CEO Jonathan Webb. “Between the pandemic and the continued extreme weather events that have disrupted our food supply—especially of fresh food sensitive to spoiling—it’s clearer than ever that the climate-resilient solution AppHarvest provides is critical to ensuring a reliable domestic food system.”
In conjunction with the transaction, Equilibrium Chairman and CEO and AppHarvest Board Member Dave Chen will exit the AppHarvest board. Chen had been serving on the nominating and governance committee.
“We thank Dave for his tremendous leadership and insights that helped AppHarvest to begin operations and to prepare to go public as part of our mission to redefine agriculture sustainably, rooted in environmental, social and governance principles,” said Webb.
“AppHarvest is a phenomenal company. I am privileged to have worked with them as a board member while Equilibrium has invested in supporting their growth and production. Equilibrium remains a supportive AppHarvest investor and looks forward to further mutually beneficial collaboration,” said Chen.
AppHarvest raised its revenue outlook range for fiscal year 2021 on February 25, 2021, versus expectations prior to the start of harvesting.
“Our favorable crop yields and market pricing currently support a 2021 sales outlook that is better than we expected in December 2020,” said Webb. “In January 2021, we delivered our first harvest of tomatoes from our flagship indoor farm and began shipping to select national grocery retailers.”