- GrowGeneration
continues to target cannabis growers with asset acquisition
- U.S.
cannabis market projected to reach $23 billion by 2020
- GrowGeneration
now operates from 21 locations in eight states
- Plans
in place to open additional locations in California, Michigan, Missouri,
Nebraska, New Jersey, Oklahoma, Oregon and Pennsylvania
With its acquisition of certain assets of BWGS, LLC
(“BWGS”), a large domestic wholesaler of indoor, hydroponic, and organic
horticultural supplies, GrowGeneration Corp. (OTCQX: GRWG) advances its
“roll-up” consolidation strategy in the national hydroponic grow supply
industry. GrowGeneration, one of the largest chains of specialty hydroponic and
organic garden centers, with 21 locations serving both commercial and home
growers, recently announced that it had purchased certain assets of BWGS,
including inventory and branded products (http://ibn.fm/wuBiy). GrowGeneration maintains its robust
track record of acquisition and its position as the largest B2B seller of
specialty hydroponic supplies in the nation.
In a news release, GrowGeneration CEO Darren Lampert stated,
“This transaction bolsters our ability to supply branded ‘house’ products to
our customers. From trellis netting, to plastic pots, to organic nutrients,
GrowGeneration will now have a complete line of private label products to offer
our customers at great prices. Further, the transaction is expected to have a
positive impact on margins and profitability in the near term.”
BWGS has been operating in the B2B horticultural supply
business for over 20 years. The company has a reputation for helping retailers
meet the demands of an evolving marketplace through its focus on innovative,
reliable, effective products for residential, greenhouse and commercial
cultivation. Since 1995 – when its first warehouse began operation – the
company has been adding hubs, and it now has depots in Charlotte, North
Carolina; Denver, Colorado; Portland, Oregon; and Visalia and Sacramento in
California that shorten delivery times and support a growing client list. At
time of asset acquisition, the BWGS product portfolio ranged across 18 family
brands, including DuraBreeze, Elemental Solutions, Sunleaves, ION, OptiLUME and
Blueprint Controllers, providing a comprehensive selection of unique and
innovative indoor gardening products.
GrowGeneration continues to expand its footprint by
consolidating horizontally in the highly fragmented $4.5 billion indoor,
hydroponic and organic horticultural supply market. Its aim is nothing less
than to be a one-stop shop for all hydroponic equipment, lighting, nutrients
and other critical products for specialty growers, including growers of
cannabis.
At the end of Q3 2018, GrowGeneration had closed
approximately $25 million in acquisitions. Its in-house M&A team already
has another $25 million in the works for 2019. So far, acquisitions have proven
to be accretive, presenting significant profit growth. Accretive acquisitions
are those that increase earnings per share (“EPS”). The accretion in earnings
has been partly driven by economies of scale resulting from the integration in
corporate infrastructure across sales, operations, purchasing, technology and
accounting. GrowGeneration’s operational business model is highly scalable and
provides opportunities for margin expansion.
Naturally, GrowGeneration’s roll-up strategy is also pushing
up the top line, with year-over-year revenue growth exceeding 100 percent.
FY2018 revenue is projected at $30 million, compared to $14.3 million in
FY2017.
GrowGeneration currently operates 23 specialty retail hydroponic
and organic gardening stores in eight states across America, including seven in
California; six in Colorado; three in Michigan; two in Oklahoma; two in Nevada;
and one each in Maine, Rhode Island and Washington. In 2019,
GrowGeneration intends to add outlets in California, Oregon, Michigan,
Missouri, Oklahoma, New Jersey, Pennsylvania and Nebraska by advancing an
extensive acquisition pipeline.
GrowGeneration also operates an online superstore for
cultivators, which is located at HeavyGardens.com. The company’s inventory
includes thousands of products, such as organic nutrients and soils, advanced
lighting technology and state-of-the-art hydroponic equipment to be used
indoors and outdoors by commercial and home growers. The company’s mission is
to own and operate GrowGeneration-branded stores in all the major legalized
cannabis states in the U.S., targeting a market that is projected to reach $23
billion by 2020.
For more information, visit the company’s website at www.GrowGeneration.com
About QualityStocks
QualityStocks is
committed to connecting subscribers with companies that have huge potential to
succeed in the short and long-term future. It is part of our mission statement
to help the investment community discover emerging companies that offer
excellent growth potential. We offer several ways for investors to learn more
about investing in these companies as well as find and evaluate them.
QualityStocks (QS)
Scottsdale, Arizona
www.QualityStocks.com
480.374.1336 Office
Editor@QualityStocks.com
Scottsdale, Arizona
www.QualityStocks.com
480.374.1336 Office
Editor@QualityStocks.com
Please see full terms of use and disclaimers on the
QualityStocks website applicable to all content provided by QS, wherever
published or re-republished: http://www.qualitystocks.net/disclaimer.php
No comments:
Post a Comment