Scotts Miracle-Gro Co., Marysville, Ohio, announced on May 3 that its Hawthorne Group has acquired Cyco, Adelaide, South Australia, for $34 million plus contingent consideration of up to $10 million. The transaction marks the fifth Hawthorne acquisition in the past year.
Cyco is a brand of premium nutrients, additives, and growing media products that are used by growers of all sizes in the hydroponic market. Hawthorne has been the exclusive U.S. distributor of Cyco products, which also are sold primarily in Canada and Australia through select retailers and distributors.
Under the terms of the deal, Hawthorne has acquired the brand and business assets of Cyco. Although the acquisition is small – about $15 million in annualized sales – Scotts said Cyco is a strategic move to expand Hawthorne’s Signature line of nutrients and growing media, including General Hydroponics, Botanicare, Terpinator, and Mother Earth.
Hawthorne intends to expand the availability of the Cyco brand in North America, and through an arrangement with the current Australian distributor will make other Hawthorne products available to hydroponic growers in that market. Scotts told analysts on May 3 that it hopes to move some of its current excess inventories to Australia.
Despite the Cyco acquisition, Scotts said it now has a pretty limited appetite for M&A, as it is not looking for cash to go out the door. “Anything would be highly strategic and probably non-cash,” Jim Hagedorn, Chairman and CEO, told analysts.