Press Releases
Sun Gro to Acquire Assets of The Scotts Company’s
Professional Growing Media Business
TRADING SYMBOL: Toronto Stock Exchange — GRO.UN
VANCOUVER, BC, July 29/CNW/ — Sun Gro Horticulture Income Fund
today announced that its wholly owned subsidiary, Sun Gro Horticulture
Canada Ltd. (Sun Gro), has signed an agreement to buy certain assets
of The Scotts Company Professional Business Group.
Effective September 30, 2004, the pending agreement provides for
Sun Gro to purchase the Metro-Mix® and Redi-Earth® professional
growing media brands from The Scotts Company. The majority
of production of the brands will be relocated to Sun Gro facilities
in Elizabeth City, North Carolina; McCormick, South Carolina; Quincy,
Michigan; and Pine Bluff, Arkansas. Modest volumes will be
produced at other Sun Gro facilities in the United States. Sun
Gro will maintain Scotts’ distribution program and will continue
to use the same growing media formulas, ensuring that growers who
use the brands will not need to interrupt or modify their current
cultural practices.
“This transaction is directly in line with our strategic
focus on the professional grower market,” said Mitch Weaver,
President and CEO of Sun Gro and a Trustee of the Fund. “The
addition of these quality brands to our product offerings will
strengthen our position in the bark-based media segment of the
professional market and further solidify our relationship with
several of our key distributors.”
Sun Gro will pay US $6 million to acquire Scotts’ professional growing
media business and estimates that the acquisition will increase its annual sales
by $16 - $18 million (Canadian). Short-term debt associated with the transaction
will be financed through the company’s acquisition line of credit. “We
expect that the acquisition will be accretive to our unit holders commencing
late this year,” said Weaver. “The new business will allow us to
use the slower summer season to add capacity at several of our US plants. We
will be spending about US $2.5 million to upgrade the capacity of the affected
plants. However, other than the capital expenditure, it is not anticipated
that significant additional fixed costs will be added to our cost structure.”
Korbin Riley, Vice President of Scotts Professional Business Group
said that the transaction allows Scotts to focus on its core competencies. “Our
greatest strengths in the professional horticultural market lie
in the areas of fertilizer and plant protection products. The sale
of our professional growing media assets to Sun Gro will allow
Scotts to successfully focus on our fundamental product categories
and drive our future success.”
Riley emphasized that both companies will work together to ensure
a seamless transition.
The Scotts Company is the world's largest marketer of branded
consumer products for lawn and garden care, with a full range of
products for professional horticulture as well. The Company
owns the industry's most recognized brands. In the U.S.,
the Company's Scotts®, Miracle-Gro® and Ortho® brands
are market leading in their categories, as is the consumer Roundup®
brand which is marketed in North America and most of Europe exclusively
by Scotts and owned by Monsanto. Additional brands include Peters® and
Peters® Excel® water-soluble fertilizers; Osmocote® control
release fertilizers; and more than a dozen herbicide, miticide,
fungicide and Aqua-Gro® water management products.
Sun Gro was founded in 1929 in Vancouver, British Columbia and has
grown to become North America’s largest producer of sphagnum
peat and the largest distributor of peat moss and peat and bark-based
growing media to professional plant growers in the US and Canada.
The company’s Sunshine® brand is widely recognized as the
premier growing media brand in the professional sector. The Sun Gro
Horticulture Income Fund is a limited purpose, open-ended trust created
in March 2002 to acquire and hold the securities of Sun Gro and its
subsidiaries. Distributions to the Fund’s unit holders are
dependent on the performance of Sun Gro.
For additional information, please contact:
Bradley A. Wiens
Vice-President, Finance and CFO
Sun Gro Horticulture Income Fund
Tel: 425-373-3603
E-mail: bradw@sungro.com
Website: www.sungro.com
Jim King
Director, Investor Relations and Corporate Communications
The Scotts Company
Tel: 937-578-5622
E-mail: jim.king@scotts.com
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