Private equity firm to acquire John Deere Landscapes

October 28, 2013 -  By

Private equity firm Clayton, Dubilier & Rice (CD&R) has agreed to acquire John Deere Landscapes (JDL) in a deal valued at about $465 million.

JDL, based in Alpharetta, Ga., is a unit of Deere & Co.’s Agriculture & Turf segment. Deere will initially retain a 40 percent ownership stake in the new stand-alone company jointly owned by Deere and CD&R. JDL’s management team and employees will remain intact, and Paul Pressler, a CD&R operating partner, assumes the role of chairman upon the close of the transaction, expected in December.

Though JDL officials say it will be “business as usual” initially, a larger footprint is in the plan.

“CD&R invested in this business because they want to grow this business,” JDL President Dave Werning told Landscape Management. “As time goes by, you will see John Deere Landscapes very active in expanding, primarily geographically.”

That growth can come several ways, Werning said: strategic acquisitions and branch openings. Growth also is expected to come from a recovery in residential and commercial construction activity.

With more than $1 billion in annual revenue, JDL is the largest North American distributor of landscaping products sold primarily to professional landscape contractors. Operating 400-plus branches in the U.S. and Canada, JDL is the only national distributor in a highly fragmented industry. Some turf and maintenance products are sold under the JDL-owned LESCO brand. JDL acquired LESCO in 2007.

“CD&R told us they’ve been looking at us for a period of time,” Werning said. “That’s not uncommon, and it was probably the result of them looking at what Deere’s core business was and what it would consider a good carve-out transaction. It was a good opportunity for us to partner up with a company that has expertise in distribution, such as CD&R with investments in places like HD Supply and Univar.”

The business areas Werning refers to are agriculture and construction.

“This partial sale allows Deere an opportunity to remain a part of a successful landscape distribution business,” said James Field, president of Deere’s Worldwide Agriculture & Turf Division. “At the same time, Deere will continue to increase its own strategic focus on the global growth businesses in agriculture and construction and the complementary businesses in turf and forestry.”

CD&R, based in New York, acquired TruGreen parent company ServiceMaster in 2007. TruGreen is the largest company in the landscape industry, according to the 2013 LM150 list, with $979 million in 2012 annual revenue.

The transaction relationship doesn’t change the relationship between JDL and TruGreen, Werning said.

“We are still two independently managed business,” he said. “Our companies are partially owned by CD&R, but we have our own management teams with responsibility for doing what’s best for our respective companies. We will make logical, commercial decisions running the business for John Deere Landscapes and there’s no reason to believe they won’t do the same.”

Updated 10/29/13.

About the Author:

Marisa Palmieri is an experienced Green Industry editor who's won numerous awards for her coverage of the landscape and golf course markets from the Turf & Ornamental Communicators Association (TOCA), the Press Club of Cleveland and the American Society of Business Publication Editors (ASBPE). In 2007, ASBPE named her a Young Leader. She graduated with a Bachelor of Science in Journalism, cum laude, from Ohio University’s Scripps School of Journalism.

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