Scotts sells off stake in TruGreen
Proceeds from sale will be used to pay down debt.
The Scotts Miracle-Gro Company has sold its 30% ownership stake in TruGreen to the majority owner Clayton Dublier & Rice for about $234 million.
Through its subsidiary Scotts LawnService, Scotts entered into the joint agreement in 2016. According to Scotts, the financial partnership formed the largest U.S. do-it-for-me lawn service company.
Scotts also said that it received another $18.4 million in cash through debt held in the join venture, and now assigned to another third-party.
Combined after-tax proceeds of roughly $120 to $140 million will be used to pay down debt, Scotts said.
After forming the joint venture, Scotts receive an approximate $200 million tax deferred dividend along with nearly a $90 million tax deferred dividend in 2017. Scotts said the two payments were equal to the initial valuation placed on Scotts LawnService when the partnership was formed.
“Shareholder value was clearly maximized by the creation of this JV and now our divestiture of this investment,” said Randy Coleman, CFO of Scotts Miracle-Gro.
In January, Scotts reported a first quarter net loss of $79.7 million, compared to a net loss of $21.2 million in the same quarter last year.
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