MINNEAPOLIS — Vireo Growth Inc. acquired Hawthorne Gardening Company LLC from the ScottsMiracle-Gro Company in an all-stock transaction. The deal exchanges $35 million in cash held by Hawthorne, approximately $58 million in net working capital, and $20 million worth of inventory (primarily growing media) for 213 million subordinate voting shares of Vireo plus a warrant to purchase 80 million additional shares at 85 cents per share, all issued to “an independent strategic partner” known as Good Dog Holdings LLC.
The shares, traded on the Canadian Securities Exchange, represent approximately 14 percent of Vireo and had a market value of about US$83.7 million at the closing bell on April 7.
The Securities involved in the transaction have not been and will not be registered under the United States Securities Act of 1933, as amended, or any U.S. state securities laws. Accordingly, the Securities may not be offered or sold in the United States except under limited circumstances.
In connection with the transaction, Vireo nominated Chris Hagedorn for election to its board of directors. Hagedorn serves as executive vice president of ScottsMiracle-Gro and prior to the transaction served as executive lead for the Hawthorne business.
