ScottsMiracle-Gro Announces New Investment Entity To Enable Cannabis Industry Investments
Hawthorne Collective to Invest $ 150 Million in Canadian Company RIV Capital
MARYSVILLE, Ohio, Aug. 10, 2021 (GLOBE NEWSWIRE) – The Scotts Miracle-Gro Company (NYSE: SMG) today announced the creation of a newly formed subsidiary, The Hawthorne Collective, which will focus on strategic minority investments in areas of the cannabis industry is not currently operated by The Hawthorne Gardening Company. To this end, The Hawthorne Collective will provide a convertible loan of $ 150 million to RIV Capital (TSX: RIV) (OTC: CNPOF) of Toronto, a cannabis investment and acquisition company currently listed on the Toronto Stock Exchange. .
The addition of The Hawthorne Collective to our portfolio allows us to explore and pursue new opportunities in an industry that is poised for significant growth in the years to come.
Jim Hagedorn, President and CEO
With a full appreciation of current banking and legal requirements, The Collective is designed to ultimately enable us to participate directly in a larger market as the legal environment changes over time.
The strategic investment in RIV Capital takes the form of a six-year convertible note. The note bears interest at 2.03% per annum for the first two years and includes additional follow-on investment rights. Upon conversion, The Collective, and therefore ScottsMiracle-Gro, would own approximately 42% of RIV Capital.
The Collective will also have the right to appoint up to three members to the Board of Directors of RIV Capital, which will be increased to seven. Neither The Collective nor ScottsMiracle-Gro will have an active day-to-day role in RIV Capital nor in the companies. in which it invests.
In documents filed with Canadian regulators and the Toronto Stock Exchange, RIV Capital has indicated that it will use funds provided by The Collective for general corporate and other legal purposes, which could include additional investments and acquisitions. Upon closing, RIV Capital will become The Collective’s preferred vehicle for future investments that are not currently the responsibility of The Hawthorne Gardening Company. The transaction is expected to be finalized in the fourth quarter of 2021.
“By making a non-equity minority investment in RIV Capital, this initial transaction will have little short-term impact on our financial performance,” said Hagedorn. âWhile this approach means that we will employ capital that will not be available for short-term investments with a more immediate return, we are confident that our partners at RIV Capital and our long-term approach will ultimately generate value. meaningful to our shareholders. “
âIndeed, the growth of The Hawthorne Gardening Company over the past six years has generated significant shareholder value. It has also allowed us to develop a rare level of expertise and insight into the cannabis space without being involved in the plant-related aspects of the industry. This is why we are beginning to invest in other areas of the industry through The Collective while continuing to pursue close strategic acquisitions to integrate with the existing Hawthorne Gardening business. “
With sales of approximately $ 4.1 billion, the company is one of the world’s largest distributors of branded consumer lawn and garden care products. The Company’s brands are among the most recognized in the industry. Company ScottÂ®, Miracle GroÂ® and orthoÂ® the brands are market leaders in their categories. The company’s wholly owned subsidiary, The Hawthorne Gardening Company, is a leading supplier of nutrients, lighting and other materials used in the indoor growing and hydroponics segment. Another wholly owned subsidiary, The Hawthorne Collective, was formed to invest in emerging areas of the cannabis industry. For more information, visit us at www.scottsmiraclegro.com.
About RIV Capital
RIV Capital is a cannabis investment and acquisition firm with a portfolio of 13 companies in various segments of the cannabis value chain. We believe that bringing people, capital and ideas together increases the potential of the entire cannabis industry. By leveraging our industry knowledge, in-house expertise and our thesis-driven investment approach, we aim to provide shareholders with exposure to specialized and disruptive cannabis companies.
Original press release
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