Scotts Lawn Service, a unit of The Scott’s Miracle-Gro Company, has entered into a definitive agreement to acquire Action Pest Control. This represents the long anticipated pest control acquisition for Scotts, which has described its strategy to expand is business to pest control under the Ortho brand.
Here is the press release:
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.