(RTTNews) - The Scotts Miracle-Gro Company (SMG), a manufacturer and seller of consumer lawn, garden, pest control, and other products, said Tuesday that it acquired Luxx Lighting, a lighting company and True Liberty Bags, a provider of liners and storage solutions to dry and cure plant products.
The two acquisitions are expected to strengthen the Hawthorne Gardening, the Ohio-headquartered acquirer's leading lighting portfolio.
ScottsMiracle-Gro's acquisition of Luxx for $215 million in December, last year adds around $100 million in sales, and a $20 million in operating income to Hawthorne on an annualized basis.
While approximately $75 million of revenue from Luxx is expected in the remainder of fiscal 2022, the transaction is expected to be neutral to the earnings of the acquirer for the current fiscal, due to the impact of purchase accounting and one-time deal costs, the company said in a statement.
True Liberty was acquired for $10 million. Hawthorne has been the primary U.S. provider of True Liberty brands, which expands Hawthorne's harvest portfolio in the post acquisitions.
Chris Hagedorn, division president of Hawthorne, commented: "…While the cannabis market continues to see near-term challenges from an over-production in recent months, we see the current reality as an opportunity to further distance ourselves from the competition and strengthen our business for long-term success."
Separately, ScottsMiracle-Gro said it is maintaining its full-year company-wide outlook for adjusted earnings per share, despite a greater-than-expected decline in Hawthorne sales for the fiscal first quarter, which ended on January 1.
For the fiscal 2022, the company had projected an adjusted EPS range of $8.50 - $8.90, and a sales growth of up to 3 percent.
First-quarter sales in Hawthorne are expected to decline around 40 percent, following a slowdown in the cannabis market as well as supply chain disruptions that have delayed the sale of certain product lines.
Cory Miller, chief financial officer, commented: "…Based on our current view of the market, we are lowering our full-year sales guidance for Hawthorne to a range of 0 to minus 10 percent on a year-over-year basis, including the expected benefit from Luxx. This range assumes a return to growth during the second half of the year."
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