Summary
Deere & Company (DE) announced on October 28, 2013, its agreement to sell its John Deere Landscapes (JD Landscapes) business unit. This business, which distributes irrigation equipment, nursery products, and landscape supplies primarily to landscape service professionals, will be acquired by an entity formed by affiliates of Clayton, Dubilier & Rice, LLC (CD&R) named CD&R Landscapes Bidco, Inc. The transaction involves the sale of the JD Landscapes subsidiaries through mergers. The deal structure involves Deere receiving approximately $300 million in cash and common stock in an affiliate of the buyer, Buyer Parent. CD&R will hold preferred stock initially representing 60% of Buyer Parent's capital (on an as-converted basis), while Deere will hold the remaining 40% in common stock. The preferred stock carries a 12% annual dividend and ranks senior to Deere's common stock in liquidation preference and dividends. The sale is subject to customary closing conditions, including antitrust approvals.
Key Highlights
- 1Deere & Company is selling its John Deere Landscapes (JD Landscapes) business.
- 2The buyer is CD&R Landscapes Bidco, Inc., an entity formed by affiliates of Clayton, Dubilier & Rice, LLC.
- 3Deere will receive approximately $300 million in cash and a minority equity stake (40% common stock) in the buyer's parent company.
- 4CD&R will hold a majority equity stake (60% preferred stock on an as-converted basis) in the buyer's parent company.
- 5The preferred stock held by CD&R has a 12% annual dividend and senior liquidation preference.
- 6The transaction is subject to customary closing conditions, including Hart-Scott-Rodino Act waiting period expiration.
- 7Shareholder approval is not required for this transaction.