TruGreen and Scotts Lawn Service plan to merge. The Scotts Miracle Gro will own approximately one third of the new entity.
The new entity will have approximately 2.5 million customers and total revenues of about $1.3 billion. The combined companies will have operating profits of about $130 million. The Company plans to operate under the TruGreen brand.
The Companies expect to realize cost synergies (cost reductions) of approximately $50 million per year. In connection with the transaction, which is expected to close in March 2016, Jim Gemison, president of Scotts Lawn Service, will join the new entity as chief operating officer. David Alexander, TruGreen’s president & CEO will continue in that role and the Company will remain headquartered in Memphis, Tennessee. TruGreen will continue to be majority -owned by private equity firm Clayton Dubilier & Rice (CD&R). John Compton, a CD&R Operating Partner and former PepsiCo President, will continue to serve as TruGreen’s Chairman.
Jim Hagedorn, chairman & CEO of The Scotts Miracle Gro Company (SMG), Scotts Lawn Service’s parent company made the announcement during its annual analyst day which is being held today in New York City. SMG made several other announcements as part of what it is calling Project Focus. Hagedorn said they had contemplated buying the TruGreen business on at least two occasion in the past. He said that they had concluded that combining the two largest and strongest brands in the lawn care industry was compelling, but that they had determined the best way to accomplish it was through a joint venture with TruGreen.
In addition to owning 30% of the combined business, SMG will control two of seven board seats.
Additional information is available at the SMG investor relations website.
Read SMG’s press release here. Read TruGreen’s press release here.