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 minority strategic investments in areas of the cannabis industry currently not 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 seek new opportunities in an industry that is poised to experience significant growth in the years to come,” said Jim Hagedorn, President and CEO of management. “With a full appreciation of current banking and legal requirements, The Collective is designed to eventually 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-controlling minority investment in RIV Capital, this initial transaction will have little short-term impact on our financial performance,” said Hagedorn. “While 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. “
“Indeed, 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 Scott®, Miracle Gro® and ortho® 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.
Caution Regarding Forward-Looking Statements
Statements contained in this press release, other than statements of historical fact, which relate to activities, events and developments that the Company expects or anticipates will occur or may occur in the future , including, but not limited to, information regarding future economic and financial performance the condition of the company, the plans and objectives of the management of the company and the assumptions of the company regarding such performance and plans are “Forward-looking statements” within the meaning of US federal securities laws which are subject to risks and uncertainties. These forward-looking statements can generally be identified as statements that include phrases such as “direction”, “outlook”, “projected”, “believe”, “target”, “predict”, “estimate”, “forecast”,, ” “may”, “objective”, “expect”, “anticipate”, “intend”, “plan”, “foresee”, “probable”, “will”, “should” or others Similar words or expressions. Actual results could differ materially from the forward-looking information contained in this press release due to various factors, including, but not limited to:
The ongoing COVID-19 pandemic could have a material adverse effect on the Company’s business, results of operations, financial condition and / or cash flow;
Compliance with environmental and other public health regulations or changes in such regulations or regulatory enforcement priorities could increase the Company’s operating costs or limit the Company’s ability to market all of its products. ;
Any damage to the Company’s reputation or to the reputation of its products or of the products it markets on behalf of third parties could have an unfavorable effect on its business;
If the Company underestimates or overestimates demand for its products and does not maintain appropriate inventory levels, its net sales and / or working capital could be adversely affected;
If the Company is unable to effectively carry out its electronic commerce activities, its reputation and operating results could be compromised;
Due to the concentration of the Company’s sales to a small number of retail customers, the loss of one or more of its main customers or a significant reduction in orders from its main customers could adversely affect the Company’s financial results;
Climate change and adverse weather conditions could have a negative impact on financial results;
Some of the Company’s products may be purchased for use in new or emerging industries or segments and / or be subject to varying, inconsistent and inconsistent laws, regulations, administrative practices, enforcement approaches, judicial interpretations and consumer perceptions. rapidly changing;
The Company’s operations may be affected if its computer systems are not functioning properly or if it is the subject of a data breach or cyber attack;
The Company may not be able to adequately protect its intellectual property and other property rights which are important to the business of the Company;
If the third reformulated marketing agreement for Roundup consumer products is terminated, or if Monsanto’s consumer Roundup business declines significantly, the Company would lose a substantial source of future profits and absorption of overheads;
Hagedorn Partnership, LP beneficially owns approximately 25% of the common shares of the Company and can significantly influence decisions that require shareholder approval;
Acquisitions, other strategic alliances and investments could cause operating difficulties, dilution and other adverse consequences that could have a negative impact on the business and operating results of the Company.
Additional detailed information regarding a number of important factors that could cause actual results to differ materially from the forward-looking information contained in this press release is readily available in the quarterly, annual and other reports publicly filed by the Company. The Company disclaims any obligation to update developments in these risk factors or to publicly announce any revision of any of the forward-looking statements contained in this press release, or to make corrections to reflect future events or developments.
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