ScottsMiracle-Gro Completes Strategic Sale of Hawthorne Subsidiary to Vireo Growth

Key Transaction Details

• Divestiture Completed: ScottsMiracle-Gro Company (NYSE: SMG) has finalized the sale of its subsidiary, The Hawthorne Gardening Company, to Vireo Growth, Inc. (CSE: VREO; OTCQX: VREOF).
• Consideration: In exchange for Hawthorne, ScottsMiracle-Gro received Vireo shares, which will be held by an independent strategic partner and reported among ScottsMiracle-Gro’s other investments.
• Financial Guidance: The company reaffirmed its fiscal 2026 guidance, emphasizing that the divestiture does not impact its full-year outlook.

Strategic Rationale and Shareholder Impact

• Core Business Focus: This divestiture marks a significant step in ScottsMiracle-Gro’s ongoing strategy to drive long-term growth by concentrating on its core North American consumer lawn and garden business.
• Margin Recovery and Profitability: The exclusion of Hawthorne is expected to contribute to margin recovery and help achieve other full-year targets, which may positively influence future earnings and shareholder value.
• Upside Potential Retained: By receiving Vireo shares, ScottsMiracle-Gro retains an opportunity to recapture value from its prior investments in Hawthorne, preserving upside potential for shareholders.

Leadership and Governance Developments

• Board Nomination: As part of the transaction, Chris Hagedorn, Executive Vice President of ScottsMiracle-Gro and former head of Hawthorne, has been nominated to Vireo’s Board of Directors.
• Growth Committee Formation: Upon his election, Vireo will establish a new strategic growth committee chaired by Chris Hagedorn. He will work closely with John Mazarakis, Vireo’s co-executive chairman and CEO, to drive growth initiatives—particularly in the cannabis consumer brands and cultivation supply sectors.
• Vireo’s Position: Vireo is a licensed, multi-state cannabis operator with a footprint in 10 states, including major markets such as California, Florida, and New York, boasting 166 dispensaries and expanded cultivation and production capacity.

Financial Reporting and Historical Data

• Discontinued Operations: The Hawthorne business has been classified as a discontinued operation effective Q1 of fiscal 2026.
• Restated Results: ScottsMiracle-Gro has provided additional historical financial results, recast to reflect Hawthorne as a discontinued operation for all quarters and annual periods in fiscal 2024 and 2025. These are available on the company’s investor website.

Advisors and Company Profile

• Financial and Legal Advisors: Moelis & Company LLC acted as financial advisor; Skadden, Arps, Slate, Meagher & Flom LLP served as lead deal counsel; Torys LLP acted as Canadian counsel.
• Company Overview: ScottsMiracle-Gro is the leading marketer of branded consumer lawn and garden products in North America, with approximately \$3.4 billion in sales. Its portfolio includes market-leading brands such as Scotts®, Miracle-Gro®, Ortho®, and Tomcat®.

Investor and Media Contacts

• Investor Inquiries: Brad Chelton, Vice President Treasury, Tax and Investor Relations, [email protected], (937) 309-2503
• Media Inquiries: Tom Matthews, Chief Communications Officer, [email protected], (937) 844-3864

Potential Price-Sensitive Aspects for Shareholders

• This divestiture sharpens ScottsMiracle-Gro’s focus on its highly profitable core business, which could lead to improved margins and operational efficiencies.
• The transaction preserves value creation potential for shareholders through retained exposure to Hawthorne’s growth via Vireo shares.
• Leadership developments at Vireo, including the involvement of Chris Hagedorn, may enhance the future performance and expansion of Hawthorne under new management, benefiting both Vireo and indirectly ScottsMiracle-Gro shareholders.
• Restated financials and discontinued operations reporting provide shareholders with improved visibility into the company’s core segment performance.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult with their financial advisors before making any investment decisions. All information is based on company disclosures and is subject to change without notice.

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