Sun Gro Completes Acquisition of Scott Professional Growing Media
Sun Gro Horticulture Income Fund announced that its wholly owned subsidiary, Sun Gro Horticulture Canada Ltd., has successfully completed the acquisition of the U.S.-based Metro-Mix and Redi-Earth professional growing media brands from The Scotts Company.
Sun Gro estimates that the U.S. $6 million acquisition will increase its annual sales by $16-18 million (Canadian). Short-term debt associated with the transaction was financed through the company’s acquisition line of credit. The Fund expects that the transaction will be accretive to its unitholders beginning later this year.
In anticipation of adding the Scotts brands to its already extensive product offering, Sun Gro used the slower summer season to begin to add capacity at several of its U.S. plants. The majority of production of the brands will be relocated to Sun Gro facilities. In total, the company plans to spend approximately U.S. $2.5 million to upgrade the capacity of the affected plants. 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.