The Scotts Company, Marysville, OH, announced yesterday that it will acquire Smith & Hawken Ltd. for about $72 million.
Smith & Hawken, Novato, CA, markets gardening-related products, starting as a cataloger in 1979. The company operates 56 retail locations, mails catalogs 14 times yearly to 18 million homes and has projected revenue of $145 million for 2004.
Smith & Hawken offerings include garden tools and high-end outdoor furniture. The breadth of product selection, in part, made the company attractive to Scotts, which owns consumer lawn- and garden-care brands such as Miracle-Gro and Ortho. The garden lifestyle industry generates $21 billion annually, according to the National Gardening Association.
Scotts has no experience in direct marketing and does not expect to use the Smith & Hawken catalog to sell its products.
“We look at this transaction more from the aspect of the value of the brand itself and the opportunities that brand has in the larger lawn and garden marketplace,” said Jim King, director of investor relations at Scotts.
One way the company will look to build the Smith & Hawken brand will be to bring it into new avenues of distribution, he said.
Smith & Hawken will continue to be run as it has been, King said, as the company intends to leave the current employees in place at their headquarters in California.
Smith & Hawken's latest catalog is to mail next week. At 44 pages it has the lowest page count of the year, said Michelle Farabaugh, senior vice president of marketing at Smith & Hawken. The usual catalog has about 84 pages, but the count is reduced to coincide with a typically slow August period.
Average page count has increased in recent years as the brand has expanded its product selection, Farabaugh said. The company introduces indoor dining items in its August catalog.
“We've been very successful with outdoor dining in the past,” she noted.
The deal includes the assumption of Smith & Hawken's $14 million of debt. It is scheduled to close Oct. 1.
