Scotts Miracle-Gro Co., Marysville, Ohio, said on March 4 that it is in talks to divest its 30 percent stake in its venture in TruGreen Holdings Inc., Memphis. Scotts, which made the announcement during a presentation at a Raymond James Institutional Investors Conference, said it is discussing the move with TruGreen majority holder Clayton, Dubilier & Rice.
CFO Randy Coleman said nothing has been finalized, but he wanted to give a heads-up that something could happen in 2019 or beyond. He said expectations are that Scotts would recover north of $100 million of after-tax cash proceeds from such a deal.
Scotts transferred its lawn service business to TruGreen back in 2016 for the 30 percent stake in the jv (GM April 29, 2016; Dec. 14, 2015). At the time, Scotts said the jv would create a lawn service business with approximately 2.3 million customers and approximately $1.3 billion in revenue that would be better equipped to bring innovation and improved service to the consumer and better drive category growth.
After moving the lawn service business to TruGreen, Scotts moved to partner with Bonnie Plants and onto acquisitions for the company’s hydroponic supply segment, Hawthorne Gardening Co. Coleman told attendees that M&A activity around Hawthorne is done for the time being. “We already have the best brands, and right now, we’re much more focused on integration, optimization, and making sure that we’re getting our business humming the way it should be.”