SMG · The Scotts Miracle-Gro Company

The completion of the Hawthorne divestiture marks a pivotal strategic shift for The Scotts Miracle-Gro Company, allowing it to sharpen its focus on the core North American consumer lawn and garden business, which generates approximately $3.4 billion in sales. Hawthorne, previously classified as a discontinued operation effective in the first quarter of fiscal 2026, provided specialized nutrients, lighting, and materials for indoor and hydroponic gardening. The transaction, executed through SMG Growing Media LLC via a Securities Purchase Agreement with Vireo Growth Inc. and Prolific Supply LLC, delivered 213 million subordinate voting shares and warrants for 80 million more in Vireo, held by an independent strategic partner and reported as investments. This structure preserves potential upside from prior Hawthorne investments while contributing to margin recovery and full-year fiscal 2026 targets, as reaffirmed in the press release. Vireo's multi-state cannabis operations and nomination of Chris Hagedorn, former Hawthorne leader, to its board signal ongoing collaboration on growth initiatives. The deal, advised by Moelis & Company LLC and Skadden, Arps, Slate, Meagher & Flom LLP, aligns with management's strategy for operational efficiencies and innovation in branded products like Scotts, Miracle-Gro, Ortho, and Tomcat.