Scotts to buy hydroponic distributor for $450M, boosting cannabis reach

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

Scotts Miracle-Gro said it agreed to buy the nation’s largest hydroponic distributor for $450 million, a deal that will bolster the U.S. lawn and garden care giant’s position in the ancillary cannabis business.

Scotts said the purchase of Vancouver, Washington-based Sunlight Supply will boost the ability of its marijuana-related subsidiary, Hawthorne Gardening, to serve the hydroponic products market.

Hawthorne itself has bought up ancillary cannabis companies such as Gavita, which produces grow lights, and Botanicare, a marijuana-centric nutrient business.

Sunlight is a supplier of horticulture, organics, hydroponic and lighting supplies.

The company serves as a distributor for several companies, including Gavita, Eye Hortilux lamps, General Hydroponics, Botanicare and Foxfarm.

In a news release, Marysville, Ohio-based Scotts said the acquisition “will create a direct distribution model for Hawthorne that will service more than 1,800 hydroponic retail customers throughout the United States.”

Scotts also said the combined annualized sales of Hawthorne and Sunlight are expected to total about $600 million – a figure that excludes roughly 20% of Sunlight’s current sales that come from distributing Hawthorne’s products.

Under the deal, Scotts – which trades on the New York Stock Exchange under the ticker symbol SMG – will pay Sunlight $425 million in cash and $25 million in equity.