Stability is what horticulture businesses want and they are finding it this spring with better March weather than experienced in 2016 and with the sale of one of the biggest players in the market after a protracted process.
In the seeds and mail-order market the purchase by BVG Group of Thompson & Morgan (T&M) parent company Branded Garden Products last week means the company finally has a settled home following years of being on and off the market. The new combined group will have a turnover of £140m with an EBITDA of around £13.5m.
T&M sells retail seeds and also offers plugs, garden-ready plants and sundries by mail order. Powys-based BVG Group is a direct seller of sporting supplements, fishing tackle, footwear and clothing as well as home and garden products. T&M will remain in Ipswich, its home since the company was founded in 1855.
T&M says: "BVG brings its strength in e-commerce and multichannel marketing to combine with T&M's deep knowledge of all things horticultural. T&M will continue to be run as a separate business with its current management team working with the team from BVG to explore opportunities to grow the business and share best practice."
The sale price is estimated at around £10m. T&M turns over £34m. Private equity investor Primary Capital had been trying to sell T&M for several years after buying it in 2002.
Sale good for marketplace
Derek Jarman of Hayloft Plants, which also supplies mail order, says: "Everyone wants certainty. This sale is good for the marketplace long term. They've been trying to sell for a long time so this is the best news for directors and employees."
He suggests that BVG may try and expand T&M's on-page offer, but Hayloft and rivals such as Parkers will also want share. "BVG seems well run and financed, which is what T&M needs - stability and strong backing."
Jarman adds that 2017 has seen a "steady" start to the season - "a fraction up on last year", which he says was better than even the peak years of 2015. The digital plant marketplace is growing at the expense of bricks-and-mortar retailers that are diversifying into restaurants, food, gifts and franchises, he says. "We are totally plants and have taken that market from traditional routes."
Ian Cross of Mr Fothergill's says: "They say they will be running T&M as a separate business with a different source of funding so we don't view it differently to where it was before. I imagine as a mail-order company they will bring their expertise in, but T&M are strong in that anyway. T&M are well known and respected and I imagine this will help them, but this makes no difference to our plans. They have been on and off the market for several years. We have always had a lot of respect for T&M and that hasn't changed."
He adds: "The season has started pretty well. It's looking far better than last year, which is a pretty universal view." Vegetable growing is coming back and, after a 2016 spring that never got started, early momentum looks set to carry the season, Cross points out.
Suttons' David Robinson says BVG is a good direct-to-consumer business with a big database and he expects it will be offering plants to all its customers in that database. "It's a good home for them. BVG have good experience in off the page, so it feels like a good fit." He adds: "We're still really optimistic for 2017. At the moment things are a bit better than this time last year."
Major company up for sale
One big horticulture company does remain in limbo, however. Scotts Miracle-Gro in the UK is for sale. "We have publicly expressed, and continue to explore, opportunities in the European market for our business," says Scotts' Molly Jenkins.
"This is part of our larger initiative known as Project Focus, which we announced in 2015. As part of this process we have received inquiries from organisations interested in potential partnerships or acquisitions. However, it would be premature to provide any specific comment on when or if a deal will occur. We also will not comment on any speculation about the potential of any specific partner.
"We're well prepared for the coming season and have all our teams focused on providing the products and solutions that retailers and consumers expect from us."