Scotts Signs Agreement to Buy Yates Ltd.

The Scotts Company has signed a definitive agreement to acquire the lawn and garden business of Yates Ltd., the leader in the Australian and New Zealand markets.

The companies' combined business will generate nearly $100 million in annual revenue, making it a significant part of Scotts' overall international business. While neutral to slightly accretive in fiscal 2004, the transaction is expected to be a significant contributor to the future earnings of the company's international operations, especially in the fourth quarter of the fiscal year.

"Australia is the most significant market in the southern hemisphere, and this transaction allows us to create a business of similar size to our market leading operations in the U.K. and France," acknowledges Jim Hagedorn, chairman and chief executive of Scotts. "This deal not only is a strong strategic fit, but is consistent with our philosophy of being market leaders wherever our products are sold. By combining our brands with Yates, we are better positioned to offer improved services and a broader range of products to retailers and consumers in these important markets while also propelling the overall lawn and garden category."

The transaction, which requires approval from Australian regulators and Yates' shareholders, calls for Scotts to pay Yates up to $26 million, subject to certain adjustments. Scotts will finance the acquisition through existing credit facilities.

David Marginson, Yates' current managing director, will lead the combined operation.

"David and the Yates team have done an outstanding job turning this business around over the past several years," explains Michel Farkouh, executive vice president of International Operations for Scotts. "Yates is a widely respected company and this transaction is an exciting opportunity for Scotts to continue building upon our worldwide base. We are confident we can further accelerate the growth of this business and continue to strengthen our position as the global leader in the lawn and garden category."