Central Garden & Pet’s (CENT) DoMyOwn Buyout to Boost Sales
As online activities have picked up amid the coronavirus crisis, Central Garden & Pet Company CENT is committed toward accelerating its digital efforts. Encouragingly, the company recently bought DoMyOwn.com (DoMyOwn), which is a fast-growing online retailer of professional-grade control products across the United States. The deal adds best-in-class e-commerce fulfillment platform and digital capabilities to the company’s portfolio as well as fortifies Central Garden & Pet’s position in the control product space. We note that the transaction was completed on Dec 18, 2020, and terms of the deal including purchase price have been kept under wraps.
Founded in Norcross, GA, in 2004, DoMyOwn used to initially focus on selling professional-grade control products online. In 2012, it added turf and ornamental products. Later in 2017, the online company had enhanced its geographical reach with warehouse additions in Utah and expanded into pet and equine products. Its digitally-driven management group and nearly 70 employees helped it become the leading online and wholesale supplier of professional-grade control products for do-it-yourself customers.
Markedly, the latest acquisition fits pretty well with Central Garden & Pet’s ‘Central to Home’ initiative. This strategy is devoted toward catering to consumer needs, reinforcing partnerships, building scale in core categories and adding digital capabilities. With the help of this acquisition, Central Garden & Pet will be able to tap and cater to the rising e-commerce demand of consumers and the retail customers’ omni-channel platforms.
Acquisition Strategy Drives Sales
We note that acquisitions form an important part of Central Garden & Pet’s strategy. The company has expanded its business via more than 50 acquisitions since 1992. Through these buyouts, management looks to enhance its manufacturing capabilities, operating synergies, distribution network, economies of scale and market advantages.
On the last day of December 2020, management unveiled plans to buy Green Garden Products (Green Garden) for $532 million. Green Garden is a key provider of vegetables, seed starters, herb and flower seed packets, and plant nutrients across North America. Markedly, the acquisition is expected to expand Central Garden & Pet’s portfolio into an attractive adjacent category and reinforce its relationship with important retailers. This deal is expected to conclude in second-quarter fiscal 2021.
Prior to the Green Garden deal announcement, Central Garden & Pet unveiled plans to buy Hopewell Nursery, which is a key live goods grower that caters to retail nurseries, landscape contractors, wholesalers and garden centers in the Northeast. This deal, which follows the addition of Bell Nursery to the company’s portfolio, will strengthen the company’s position in the live goods space with high-quality offerings.
Earlier, the company had acquired C&S Products, which has been complementing its existing wild bird feed business. It has also taken over the remaining 55% stake in Arden Companies. The company also bought Bell Nursery, a leading grower and distributor of live flowers and plants, as well as General Pet Supply, a supplier of pet food and supplies. All these buyouts are fueling this Zacks Rank #3 (Hold) company’s top line, which improved 25% year over year during fourth-quarter fiscal 2020.
Clearly, Central Garden & Pet has been strengthening its position in the pet supplies, and lawn and garden supplies space. Moreover, it has been developing new products, advancing digital capabilities, optimizing supply chain and focusing on marketing activities. Impressively, the California-based firm’s shares have risen 25.7% over the past year versus the industry’s 19.1% rise.
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