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Scotts Miracle-Gro Co (NYSE: SMG) Acquired Luxx Lighting and True Liberty Bags



Scotts Miracle-Gro Co

Scotts Miracle-Gro Co (NYSE: SMG) has purchased Luxx Lighting. The move expands The Hawthorne Gardening portfolio. Scotts Miracle-Gro has also bought True Liberty Bags.

According to the division president of Hawthorne, Chris Hagedorn, the transactions show their dedication to giving cannabis cultivators innovative solutions. He adds that the cannabis market has experienced challenges in overproduction for the past few months. For this reason, the company has decided to separate itself from the competition and follow opportunities that guarantee long-term growth.

Hagedorn states that the acquisition of True Liberty gives the company its first opportunity in the market. The purchase of Luxx Lighting, on the other hand, makes their portfolio bigger than their competitors.

 The company will leverage Luxx’s relationship with Jungle Boys

Luxx has years of experience in the cannabis market. Moreover, it has collaborated with Jungle Boys to design, refine, and test its lights. Scotts Miracle-Gro will use Luxx’s relationship with Jungle Boys to market the Luxx brand.

Luxx will join a product line-up with the Sun Systems and Gavita brands. Hagedorn has stated that the company will provide more details on how Luxx will improve processes and cost synergies.

Terms of the transactions

The purchase of Luxx cost the company $215 million. In addition, Hawthorne will begin to distribute Luxx products to its existing and new markets, such as the East Coast. The transaction also adds $20 million of operating income and $100 million of sales manually to Hawthorne. The company expects about $75 million of revenue from Luxx.

The company also acquired True Liberty for $10 million. Hawthorne was previously the main provider of the company’s brands.

Scotts Miracle-Gro has previously acquired HydroLogic Purification Systems in 2021. The transaction enabled Hawthorne to venture into the water purification and reclamation sector. It also acquired Rhizoflora the same month. Rhizoflora offered industry-leading Purpinator and Terpinator brands

The company expects that Hawthorne sales will decline by about 40% because of supply chain issues and a slowdown in the cannabis industry that has made it harder to move products. However, the company believes that this will change in January.

Sales in the U.S could decline by less than 20%. This number is less than the company has expected. The company’s consumer segment in the U.S is continually performing.

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