Central Garden & Pet Company CENT looks well poised on solid strategic endeavors. The company is committed toward strengthening its position in the pet supplies and lawn and garden supplies space. In fact, it has been making prudent buyouts to consolidate its position. Meanwhile, the company has been developing products, advancing digital capabilities, optimizing supply chain and focusing on marketing activities to widen its reach. We believe these efforts will keep yielding favorable results ahead. Let’s delve deeper.
Acquisition Tactic Holds Promise
Acquisitions form an important part of Central Garden & Pet’s strategy. Markedly, the company has expanded its business via more than 50 acquisitions since 1992. Through these buyouts, management seeks to enhance its manufacturing capabilities, operating synergies, distribution network, economies of scale and market advantages. Apart from fortifying the company’s portfolio, these buyouts contribute to sales and overall performance.
Treading the same path, the company recently bought DoMyOwn.com (DoMyOwn), which is a fast-growing online retailer of professional-grade control products in 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 its position in the control product space.
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 the DoMyOwn acquisition, Central Garden & Pet will be able to tap and cater to the rising e-commerce demand.
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, looks to strengthen the company’s position in the live goods space with high-quality offerings.
Central Garden & Pet, which boasts strong commercial relationships with Walmart (NYSE:WMT) WMT, Home Depot (NYSE:HD) HD and Lowe’s LOW, had earlier acquired C&S Products. This buyout complements the company’s existing wild bird feed business. It also purchased 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.
Certainly, these acquisitions enhance Central Garden & Pet’s brand portfolio, and in turn fuel the top line. These buyouts are widening the company’s customer base, helping it to capture greater market share.
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