Sun Gro Horticulture Income Fund (TSX:GRO.UN) has acquired Orlando, Florida's Grow Best Holdings LLC for US$22.4 million.
The acquisition of Grow Best, the largest producer of professional peat mixes in the sunshine state, will expand and diversify Sun Gro's market and product line in Florida.
The company will spend US$20.3 million on all the outstanding shares of Grow Best and US$2.1 million to acquire real estate and equipment used by the company.
The deal is expected to close October 1 and is funded through the issuing of US$2 million worth of Sun Gro trust units and US$20.4 million from the trust's line of credit. It's expected to be modestly accretive for unitholders in the fourth quarter of 2007, but could add a projected US$32 million in annual sales next year.
Sun Gro has been on an acquisition spree in the past year. It bought two peat-mixing plants in California in January and a peat moss producer in Quebec in June. With Grow Best deal, Sun Gro now has manufacturing facilities in the four largest markets for professional growing mix products in the U.S.A.
Sun Gro's unit price range during the past week: between $7.57 and $7.61; 52-week high: $8.77; 52-week low: $5.98.