David Werning said the private-equity firm that bought the company's majority interest intends to grow the business.
While John Deere’s sale of its majority interest in the company’s landscapes business to a private equity investment firm means no short-term changes, the move could mean growth for John Deere Landscapes in the future.
“We will have the same people behind the counters and making deliveries to (landscapers) that they had yesterday,” John Deere Landscapes CEO David Werning told Lawn & Landscape. “Long term, we very much hope to add services that we provide them with.”
Deere & Co. agreed to sell a majority interest in its landscapes business in October to private equity investment firm of Clayton, Dubilier & Rice. John Deere Landscapes has been included in Deere's agriculture and turf segment.
“CD&R is clearly interested in growing the business. That’s why they have invested in John Deere landscapes,” said Werning, while adding that the business will grow geographically through opening up new stores or through acquisitions.
As a result of the transaction, Deere will receive approximately $300 million in cash and will initially retain a 40 percent equity interest in the business.
"This partial sale allows Deere an opportunity to remain as part of a successful landscapes distribution business," said James Field, president of Deere's Worldwide Agriculture & Turf Division. "At the same time, Deere will continue to increase its own strategic focus on the global growth businesses in agriculture and construction and the complementary businesses in turf and forestry."
Deere formed the landscapes business in 2001 when it purchased and merged two companies that sold wholesale landscape supplies and irrigation products. Two other acquisitions were later added and now John Deere Landscapes is one of the largest U.S. wholesale suppliers of turf and ornamental agronomics, irrigation, outdoor lighting, nursery and landscape materials.
“For CD&R, it's wonderful timing because there’s an anticipated improvement in the market place as just the general economy improves,” Werning said. “For Deere, this is just a continuation of a strategy that they announced a while ago where their focus is core growth of ag and construction. And this allows them to sharpen that focus on ag and construction and partner with somebody that has exhibited experience and expertise in distribution businesses.”
Werning added there will be no short-term personnel changes because of the move, but said adding employees in the future is a possibility.
“There are definitely no cutbacks,” he said. “This is a change in ownership. This is not a change in management of the company and it’s not a change in direction. So what I mentioned before, the customers will see the same employees behind the counter making deliveries that we did before. It’s our intentions to grow. It’s our intention to grow and we will add personnel accordingly to match our expansion.”
The deal is expected to be completed by mid-December, Werning said.
John Deere Landscapes has more than 2,000 employees at approximately 400 locations in 41 states.