On March 14, Greenhouse Grower broke the story to the industry that Bell Nursery Holdings LLC, headquartered in Elkridge, MD, had been acquired by Central Garden & Pet Company, a leading innovator, producer, and distributor of branded and private-label products for the lawn and garden, and pet supplies markets. Bell Nursery, one of the largest commercial growers of flowers and plants in the Eastern U.S. and the largest in the mid-Atlantic region, has production facilities in North Carolina, Virginia, Maryland, Ohio, and Delaware. With 7,400,000 square feet of environmentally controlled greenhouses and an extensive contract grower network, Bell Nursery was ranked No. 7 on Greenhouse Grower’s 2017 Top 100 Growers list. The operation sells live goods exclusively to The Home Depot, serving 300 stores for the retailer. Central Garden & Pet expects the acquisition to be final in fiscal 2018, according to a Business Wire release.
Since the announcement of the Bell Nursery acquisition, Central Garden & Pet also acquired an additional pet food and supply company, Midwest-based General Pet Supply, and announced that Brooks Pennington III (Sonny) has succeeded Bill Brown as Chairman of the Board. Brown will remain on the Board of Directors and continue to focus on higher-level strategic initiatives for the company. Pennington has been on Central Garden & Pet’s Board of Directors for 20 years, and has been the company’s Director of Special Projects since 2006. Prior to that, Pennington was the President and CEO of Pennington Seed, and has nearly 40 years of experience in the lawn and garden industry. Pennington Seed was acquired by Central Garden & Pet in 1998.
Bell Nursery Former CEO Gary Mangum Says Acquisition is a Win-Win-Win
In light of the March 14 announcement that Bell Nursery Holdings LLC had been acquired by Central Garden & Pet, Greenhouse Grower caught up with Bell Nursery’s now former CEO Gary Mangum to get the backstory on the deal. Here is our full interview with Mangum.
Greenhouse Grower (GG): Why did you decide to sell Bell Nursery Holdings LLC to Central Garden & Pet?
Gary Mangum: I received a call asking if we’d be interested in talking about a potential relationship. From the earliest conversation, we started to think about the benefits that could accrue to our business, as well as our only customer, if we were working with a strategic partner that had the strengths that we already knew were associated with Central. From the first conversation to the most recent, I could see how this could unfold as a real win-win-win for all parties. Succession planning can be a difficult thing to get sorted out, but this scenario really helps create a path I’m very confident in, and a number of people in our business were aware of and engaged in the process. We expect to operate essentially as a stand-alone business within Central.
GG: How long have you been talking with Central Garden & Pet about this deal? Were there other potential buyers interested? What made Central Garden & Pet the best choice?
Mangum: We had some constructive “what if” conversations that stretched over a six-month period, and substantive and exclusive conversations related to the actual structure and deal specifics for another six months. We were not shopping for a buyer, and did not entertain other offers. This was not a wealth-building move for us, it was a strategic decision for the business and its people.
GG: What is the acquisition deal that Bell Nursery Holdings LLC is acquired for, from Central Garden & Pet?
Mangum: Central got an excellent value that to my knowledge creates no debt burden on the ongoing business. For me and our equity partners, including Mike McCarthy, Brett Guthrie, Jonathan VanWingerden and Bryan Ulery, this was about properly positioning Bell for the future, for the good of our customer and our employees. Our people trust us, and they have always given everything asked and more. “Act Like You Own It” has always been our internal mantra, and this platform will create great opportunities.
GG: What was the stakeholder position prior to striking the deal with Central Garden & Pet? What other investors had to sign off on the deal?
Mangum: Our New York-based equity partners owned the majority of Bell’s shares. As they did through our entire relationship, they fully supported us and this direction. I could never say enough positive things about the private equity experience we had, and I’m equally excited about the future.
GG: What does the acquisition mean for Bell’s relationship with The Home Depot?
Mangum: We’ve shown The Home Depot (THD) that we are a consistent supplier of quality, and over a long period of time we’ve shown we offer strong service and that we’re committed and reliable. In our more recent history under Brett Guthrie’s leadership, we’ve maintained our overall quality and vigorously supported THD planning, while also showing a keen interest in growth.
GG: How will Bell Nursery be run going forward, once the acquisition is complete? How will Central Garden & Pet continue to work with existing management and employees?
Mangum: Bell brings Central into a completely new business stream — live goods. We’ve seen that it has extraordinarily smart and dedicated employees across the garden business and across the company. Through our conversations, it became very clear that Central recognizes the important role our people will play in the development of this business stream.
Essentially, the business will run as it has for the past two years, with Brett Guthrie as the Chief Operating Officer making the vast majority of the decisions and motivating our managers to be the best that they can be. I will remain as I am today, in a supporting role to help where I can be useful and to make sure that the Bell model continues to provide the garden consumer, wherever they may be, a gratifying experience and a good value. Brett will report to the President of Central’s Garden Division, but we will essentially operate like a stand-alone business.
GG: How will your role, and the roles of your key managers and team, change, if at all?
Mangum: Roles and responsibilities will remain generally as they are. My personal involvement is reduced as Brett and our leadership team is and has been about the future. New opportunities for individual growth always exist, and both now and as the business grows there’s no doubt we want to be an attractive option for new graduates in a wide range of positions. We’re a supporter of Seed Your Future, and strongly believe in working together with industry leaders and educators to develop more student interest in our environmental industry.
GG: How will Central Garden & Pet’s management be involved with Bell Nursery?
Mangum: Our offices, facilities, and structure will remain where they are. We know there will be substantial benefits that will accrue by being part of the Central team and that our customer and our teams will see long-term gains with us working together. As Brett shared with our employees as part of our announcement — “tomorrow looks just like yesterday,” but I’ll add that’s with more long-term opportunities for our team.
GG: How will Central Garden & Pet incorporate Bell into its family of offerings?
Mangum: Central is known as an innovator with an excellent reputation. We know that we’re a new platform for the future, and part of a growing team that cares about its customers and end consumers across garden and pet. I can’t think of any kind of businesses I’d rather affiliate with.
GG: What opportunities does this provide for Bell Nursery going forward? How will the company continue to grow?
Mangum: We’re committed to focusing on what we know. We are confident in our approach to our business and driving results for Bell and The Home Depot. In 2018 we are supplying 110 new stores, and we will continue to operate based on our longstanding belief that we’re only as good as our last delivery. We expect to earn further growth opportunities over time. We do know we will have a better platform to help promote gardening and related customer satisfaction by being part of this larger, more sophisticated, and frankly very innovative organization.
GG: What will be some early initiatives implemented in Bell Nursery once the acquisition is complete? What will change? What won’t change?
Mangum: We will add capacity and talent. We will continue to focus on consistent quality along with the necessary harvest discipline. With Central’s long-term experience with innovation, distribution, and quality control, we expect to blend our experiences and put that to work for the Home Depot. What won’t change is the quality focus, or our long-proven merchandising services and the related people that make this business work. Our folks will continue to be found easily identifiable in purple. We know our farm-family grower network helps make us better, so that continues as it has with a possible look toward expansion.
GG: What is the overall mood, and what was the reaction of the Bell Nursery team following this news?
Mangum: Overall, very positive. I have long seen that change is good. In this case it’s good to know that there is zero loss of jobs, and it’s very reasonable to anticipate growth opportunities for this team. I can’t wait to look back five years from now.
GG: What was the reaction of the team at The Home Depot following this news?
Mangum: The reaction was positive. We expect to be a key contributor to The Home Depot garden growth over a long period of time. Collaboration and candor have been and will continue to be important in this key business relationship.
GG: How do you and your family feel about the acquisition? How will you ensure that the Bell legacy lives on?
Mangum: This may be the toughest question I’ll answer. Bittersweet would be the real answer. The Founder of Central Garden & Pet, Bill Brown, helped this decision make great sense to me. He was aware of what was going through my mind as he’s bought many businesses over time. There was no illusion that this consideration was about the past, but was about the future. Brett played the most important role in so much of the dialogue that developed, and he and our CFO Steve Crider worked very closely with the Central team from start to finish.
The Bell legacy is based on our core principles of Quality, Service, Innovation, and Value, and that focus dates to our earliest days and has been maintained by our team. In the Central Welcome Letter to our employees, Central’s CEO and President George Roeth wrote that Quality, Innovation, and Value are core principles of Central, and how we are so closely aligned. Always important to me was making sure our growers always used the space, quality inputs, and time they needed to provide superior quality. Much like “Act Like You Own It,” that understanding and expectation is locked in our core values. My nephew Cole (Mangum) plays an important role in the business today and going forward on the production side. My daughter Heather (Mangum) works with passion and makes me proud in the service side of the business, and my younger brother Dale (Mangum) has lived our business values most of his life after successfully owning and operating his own floral business for many years. Today, Dale makes sure Bell suppliers have a good experience, and we get what we expect every time.
GG: What do you want the industry to know about this acquisition? What should your suppliers understand?
Mangum: I think we’ve had a reputation of being quite transparent over the years. I always felt it was best to maintain a respectful, and to the extent practical, collaborative relationship with other suppliers. Some of my favorite people, equally open, would be classified as “the competition.” Bell will continue to invest to promote gardening for the end consumers in order to continue to support the continued growth of the industry.
You ask about suppliers — Ball Horticultural Co. has been there for us from day one, and there’s no doubt that the Bell of the future will continue to build on the strength of our past and future supply relationships. I’m not sure I’ve ever met anyone as insightful and inquisitive as Anna Ball. She is such a fine example of someone who is truly committed to making this industry better, as her companies work to make plants perform better for the grower, retailer, and end user. Anna’s drive and work ethic is really second to none. I know Brett feels the same way. Bill Doeckel (of Ball Horticultural Co.) has also been a key part of this relationship over so many years.
GG: With the industry going through a generational shift, do you think we’ll see additional large grower operations looking for outside investors/buyers? What should growers know about this process?
Mangum: Yes. The most important part of the acquisitions we’ve participated in is the team that works with the acquired business. Experience and attitude matters, and this industry is not one where experienced operators and staff can or should be eliminated. Facilities and relationships matter — but people matter the most. I would say that as both a buyer and a seller.
GG: Anything to add?
Mangum: My focus for the foreseeable future remains Bell and my family. I’ll do anything that I can to be helpful. I’ll happily sit on the pier reading a book with my grandchildren if those days are here, but I’ll also be popping into stores on occasion as I’ve done now for 25 years, or walking a greenhouse, or having lunch with someone who may have an interest in their own version of succession planning. Oh, and we have a Governor here in Maryland to help get re-elected. That’s something my wife and I are very enthusiastic about.