ScottsMiracle-Gro Signs Definitive Agreement to Acquire Action Pest Control
Transaction is consistent with Company's long-term strategy to accelerate the growth of its service business
MARYSVILLE, Ohio, Oct. 20, 2014 /PRNewswire/ -- The Scotts Miracle-Gro Company (NYSE: SMG), the world's leading marketer of branded consumer lawn and garden products, today announced that its subsidiary EG Systems, Inc., doing business as Scotts LawnService, has signed a definitive agreement to acquire the assets of Action Pest Control, Inc., one of the largest residential pest control providers in the Midwest and a Pest Control Magazine Top 100 company.
The transaction, which is expected to close by January 2015, would mark the Company's first acquisition of a home pest control business. For more than a year, Scotts LawnService has been operating a pest business in Florida using the Company's Ortho brand. The effort has provided a successful proving ground for a business model that offers consumers the benefit of a lawn and pest service from the same provider.
"Just as the Scotts brand has resonated with our lawn service business, the Ortho brand shows great long-term promise for home pest control," said Jim Hagedorn, chairman and chief executive officer. "The demographics and economics of the service industry are strong strategic fits for our business. We are excited to complete the acquisition of Action Pest and see it as an important step forward in executing our long-term growth strategy."
Scotts LawnService, with anticipated sales of approximately $260 million in fiscal 2014, is currently the No. 2 player in lawn service. Given the fragmented nature of the $7 billion home pest control category, the Company believes it can complement organic growth in lawn service by consistently expanding its pest control platform.
Action Pest provides a comprehensive range of residential and commercial pest control services to homeowners and businesses throughout Indiana, Kentucky, and Illinois. The Company expects the Action Pest business to add annual sales approaching $15 million and for the transaction to be earnings accretive in fiscal 2015.
With more than $2.8 billion in worldwide sales, The Scotts Miracle-Gro Company is the world's largest marketer of branded consumer products for lawn and garden care. The Company's brands are the most recognized in the industry. 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. In the U.S., we operate Scotts LawnService®, the second largest residential lawn care service business. In Europe, the Company's brands include Weedol®, Pathclear®, Evergreen®, Levington®, Miracle-Gro®, KB®, Fertiligene® and Substral®. For additional information, visit www.scottsmiraclegro.com.
Cautionary Note Regarding Forward-Looking Statements
Statements contained in this press release, other than statements of historical fact, which address activities, events and developments that the Company expects or anticipates will or may occur in the future, including, but not limited to, information regarding the future economic performance and financial condition of the Company, the plans and objectives of the Company's management, and the Company's assumptions regarding such performance and plans are "forward-looking statements" within the meaning of the U.S. federal securities laws that are subject to risks and uncertainties. These forward-looking statements generally can be identified as statements that include phrases such as "guidance," "outlook," "projected," "believe," "target," "predict," "estimate," "forecast," "strategy," "may," "goal," "expect," "anticipate," "intend," "plan," "foresee," "likely," "will," "should" or other similar words or phrases. Actual results could differ materially from the forward-looking information in this release due to a variety of factors, including, but not limited to:
- Compliance with environmental and other public health regulations could increase the Company's costs of doing business or limit the Company's ability to market all of its products;
- Increases in the prices of raw materials and fuel costs could adversely affect the Company's results of operations;
- The highly competitive nature of the Company's markets could adversely affect its ability to maintain or grow revenues;
- Because of the concentration of the Company's sales to a small number of retail customers, the loss of one or more of, or significant reduction in orders from, its top customers could adversely affect the Company's financial results;
- Adverse weather conditions could adversely impact financial results;
- The Company's international operations make the Company susceptible to fluctuations in currency exchange rates and to other costs and risks associated with international regulation;
- The Company may not be able to adequately protect its intellectual property and other proprietary rights that are material to the Company's business;
- If Monsanto Company were to terminate the Marketing Agreement for consumer Roundup products, the Company would lose a substantial source of future earnings and overhead expense absorption;
- Hagedorn Partnership, L.P. beneficially owns approximately 27% of the Company's common shares and can significantly influence decisions that require the approval of shareholders;
- The Company may pursue acquisitions, dispositions, investments, dividends, share repurchases and/or other corporate transactions that it believes will maximize equity returns of its shareholders but may involve risks, such as risks of integration of acquired businesses, the possibility that anticipated synergies from strategic acquisitions may not materialize, and the risk that sales of acquired products may not meet expectations.
Additional detailed information concerning a number of the important factors that could cause actual results to differ materially from the forward-looking information contained in this release is readily available in the Company's publicly filed quarterly, annual and other reports. The Company disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments.
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SOURCE The Scotts Miracle-Gro Company