.jpg)
The leadership team from Scotts Lawn Service is (from left to right) CFO Rob Walters; President Mark Wilhelmi; COO Jim Gimeson; VP Business Development Kemp Anderson; and VP of Finance Mike Goodrich.
MARYSVILLE, Ohio – The Scotts Miracle-Gro Company announced that its subsidiary EG Systems, doing business as Scotts LawnService, has signed a definitive agreement to acquire the assets of Action Pest Control, Evansville Ind., which 56th on the 2014 PCT Top 100 list (L&L’s sister publication), with annual revenues of $11.6 million.
The transaction, which is expected to close by January 2015, would mark the company's first acquisition of a structural 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, Scotts reports.
"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 and ranked sixth on L&L’s 2013 Top 100 list. Given the fragmented nature of the $7 billion home pest control category, the company says it believes it can complement organic growth in lawn service by consistently expanding its pest control platform.
Scotts has been exploring the structural pest control market for several years. During a February conference call to review the first fiscal quarter, Barry Sanders, Scotts’ president and chief operating officer, told analysts the company was planning to acquire at least one regional pest control service company in 2014.
“We currently are exploring acquisition opportunities in (the pest-service) space, and I wouldn’t be surprised ... if we don’t make our first test acquisition in 2014,” Sanders said.
Terms of the deal were not disclosed.