ScottsMiracle-Gro sells TruGreen stake to retire debt

ScottsMiracle-Gro sells TruGreen stake to retire debt

The Marysville-based company sold its 30 percent stake in TruGreen for $234 million.

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March 21, 2019

 

MARYSVILLE, Ohio, March 20, 2019 (GLOBE NEWSWIRE) -- The Scotts Miracle-Gro Company announced March 20 that it has sold its approximate 30 percent stake in TruGreen to the majority owner, in a transaction in which ScottsMiracle-Gro received approximately $234 million, according to a press release on the ScottsMiracle-Gro website.

In 2016, the company contributed its wholly owned subsidiary, Scotts LawnService, into a joint venture with TruGreen, creating one of the largest do-it-for-me lawn service companies in the U.S. Seventy percent of the joint venture was owned by the private equity firm Clayton Dublier & Rice, its co-investors and TruGreen management, with the balance owned by ScottsMiracle-Gro.
 
In addition to the sale, ScottsMiracle-Gro also received cash proceeds of another $18.4 million in connection with the assignment to a third party of debt of the joint venture. The combined proceeds, approximately $120 to 140 million on an after-tax basis, will immediately be applied to reduce the company’s indebtedness.
 
Upon the creation of the joint venture, ScottsMiracle-Gro received an approximate $200 million tax deferred dividend. In 2017, it received another tax-deferred dividend of approximately $90 million. Those two payments were essentially equal to the initial valuation placed on Scotts LawnService when the joint venture was established.