Vancouver-based Sunlight Supply Inc. is being purchased by multinational corporation Scotts Miracle-Gro for $450 million, $25 million of which is in stock.
The sale — one of the largest in Clark County history and the largest ever made by Scotts — was announced via a press release Tuesday afternoon. It is expected to close by June 1, pending approval by the Securities and Exchange Commission.
Sunlight Supply will become part of Scotts Miracle-Gro’s hydroponics gardening subsidiary, Hawthorne Gardening Co.
Jim King, senior vice president of corporate affairs with Scotts, said there should be no layoffs in Vancouver as a result of the purchase.
“Our intention is to extend offers to everybody in the Vancouver facility,” he said. “Our intent is to consolidate some of our other operations into that facility and add more jobs to the local economy. That said, we are integrating two companies. If there are overlapping or duplicating roles, there could be some scaling back of those roles … but that’s unlikely to affect the Vancouver plant.”
Sunlight founder and CEO Craig Hargreaves and Sunlight Executive Vice President Doug Hargreaves and other senior Sunlight officials will join Scotts Miracle-Gro.
In a news release, Jim Hagedorn, chairman and CEO of Scotts Miracle-Gro, described the sale as “a game-changing moment for Scotts Miracle-Gro, for Hawthorne, the hydroponic products industry and the users of our products.”
Sunlight Supply, with headquarters at 3204 N.W. 38th Circle, is the largest hydroponic products distributor in the United States. Last year, the company recorded sales of roughly $460 million, about 20 percent of which were from distributing Hawthrone’s products.
In the last year, Sunlight opened a 350,000-square- foot distribution center in Vancouver. That facility will be the central facility in Hawthorne’s supply chain. The company also maintains eight distribution centers in North America.
Hawthorne Gardening Co. owns hydroponic brands including Gavita, Botanicare and Can-Filters. Last year, it reported about $290 million in sales.
According to the release, the purchase of Sunlight Supply will greatly enhance the ability of Hawthorne to meet the needs of the hydroponic products marketplace.
“Combining Hawthorne’s industry-leading product portfolio with Sunlight’s unparalleled distribution capabilities and complementary portfolio will benefit consumers and all stakeholders in the hydroponic marketplace,” King said. “It reinforces our confidence in the future of this industry and takes Hawthorne to a new level as a business with unique competitive advantages.”
Scotts expects the two companies to have combined sales of $600 million and directly serve more than 1,800 hydroponic retail stores in North America.
Scotts is the country’s largest supplier of lawn and garden products, but 80 percent of its consumer product sales happen at just a handful of major retailers, King said. Purchasing Sunlight made more sense than building out a whole new distribution chain for its hydroponic products.
The move will greatly expand Scotts’ footprint in the marijuana cultivation industry, much of which is grown indoors hydroponically. Indeed, research firm Cowen & Co. expects legal pot sales to top $75 billion by 2030, according to Bloomberg News.
However, King was also clear that indoor cultivation includes fruits, vegetables and flowers.
“More states are allowing cultivation and … (marijuana) is being grown hydroponically,” he said. “But there’s much more than pot driving the issue.”
King said it’s unclear whether Sunlight Supply’s name will remain or if it will be dropped in favor of Hawthorne. It’s also unclear at this point whether Sunlight Supply will maintain its prominent sponsorship role at the amphitheater next to the Clark County Fairgrounds.
After the announced sale, Scotts’ stock saw little change on the market, closing at $88.14 Tuesday.
The sale is one of the largest in the county’s history, but not the largest in recent history. In 2012, Church & Dwight Co. of Princeton, N.J., purchased Vancouver-based Northwest Natural Products, a gummy vitamins manufacturer, for $650 million.