VOL. 130 | NO. 241 | Friday, December 11, 2015
Scotts LawnService to Merge With TruGreen
By Bill Dries
Memphis-based TruGreen Holdings Inc. is merging in a joint venture with the Scotts LawnService division of Scotts Miracle-Gro Co. of Marysville, Ohio.
(Daily News File/Andrew J. Breig)
Scotts executives announced the joint venture Thursday, Dec. 10, during an analyst and investor day meeting in New York.
Under the terms, the combined business will operate as TruGreen and be based in Memphis, where TruGreen headquarters are presently.
Scotts will own a 30 percent equity stake in the business and a fund managed by Clayton, Dubilier & Rice, the private equity firm that controls TruGreen Holdings, will hold the controlling interest.
TruGreen CEO David Alexander will lead the new company and John Compton will remain as chairman of the new TruGreen board. Scotts president Jim Gimeson will be chief operating officer.
TruGreen arranges the debt financing with both sides saying they expect to close the deal in early 2016.
The Scotts Miracle-Gro business of consumer products under the Scotts, Miracle-Gro and Ortho brands – as well as Roundup – are not affected by the merger of its residential lawn care service business with TruGreen.
In fact, Scotts executives paired the merger news Thursday with a set of strategic initiatives on other fronts in North America that include a likely move to a live plants business and continuing investments in hydroponic gardening businesses.
“The commitment requires choices, which means we must re-evaluate the assets in our portfolio that we no longer see as core,” Scotts chairman and CEO Jim Hagedorn said in a written statement.
Hagedorn added that the “do-it-for-me lawn service” sector has favorable demographics and trends.
“Given the complexity of the transaction, as well as the relative value of the two businesses, it was equally clear the best way to make such a combination work was for us to take a minority position,” he said.
TruGreen was spun-off from Memphis-based ServiceMaster Co. in 2014. It employs about 300 locally.
Earlier this year, TruGreen inked a deal to move its more than 300 Memphis-area employees and its corporate headquarters to a 65,000-square-foot space at the Forum II office building in East Memphis, 1790 Kirby Parkway.
The new headquarters was designed to house up to 400 corporate associates; move in is set for January.
Company spokesperson Amy Simpson said TruGreen does expect to create new local jobs as a result of the merger, although she said the company doesn't yet know how many and what type of positions will be generated.