PE firm set to buy Scotts Miracle-Gro

Scotts Miracle-Gro has announced a binding offer from Exponent Private Equity LLP to acquire its international consumer business.

The lawn and garden products firm announced its receipt of the offer on May 2, which will see Exponent Private Equity LLP acquire its European and Australian consumer operations. The proposed transaction is expected to close before September 30, subject to regulatory approval and prior information and consultation with Works Councils and employee representative bodies.

The proposed sale includes Scotts Miracle-Gro operations in Australia, Austria, Belgium, France, Germany, Poland and the UK. Under terms of the proposed deal, Scotts Miracle-Gro associates in these locations would become employees of the Exponent-owned operations upon closing. Scotts Miracle-Gro brands and products would continue to be manufactured and marketed in Europe and Australia, as a result of licensing and sub-licensing agreements.

The firm’s brands in Europe include Roundup, Weedol, Pathclear, Evergreen, Levington, Miracle-Gro, KB, Fertiligène, Substral, Osmocote and Naturen, the availability of which is dependent upon the country. Among the brands in Australia are Scotts, Osmocote, Naturen, Roundup, Home Defense and Pure Organics.

Scotts Miracle-Gro SVP of international operations Phil Jones commented: “Our international lawn and garden business is the strongest in the marketplace with outstanding brand recognition and a talented and dedicated team of associates. We’re delighted to have reached the proposed agreement with Exponent, as they would be an excellent steward of the brands and be well positioned to take the business to the next level. We expect the proposed transaction to be seamless to our retail partners, consumers and associates.”

The proposed sale reflects Scotts’ commitment – announced as Project Focus in the company’s fiscal year 2016 – to concentrate more of its resources on its US business. Since then, the company has sought to find a partner or buyer of its international business who would steward the brands, give stability to associates and invest in growth opportunities.

Exponent is an experienced and successful investor in consumer businesses with high-growth potential. It invests primarily in businesses with significant presence in the UK, with enterprise values between £75m and £400m. The proposed sale would mark Exponent’s first investment in the lawn and garden market.

Commenting on the acquisition, Exponent partner Simon Davidson said: “These are market-leading garden care brands loved by consumers around the world. We look forward to working with the Company and investing further in advertising and innovation to continue to grow these brands and unlock the full potential of the business.”

Exponent works with businesses across a broad range of sectors and its current and former portfolio companies include businesses, such as Quorn Foods, Photobox Group, Loch Lomond Whisky, Big Bus Tours, the Ambassador Theatre Group and Trainline. This transaction would represent Exponent’s 18th corporate carve-out transaction since it was founded in 2004; it has acquired businesses from a range of vendors, including Premier Foods, DMGT, BBC, News Corporation, Umeco, Live Nation, Virgin and Alere.