Orange-based wholesale and retail plant and tree growing business Village Nurseries, which owns more than 500 acres in Southern California, is nearing a court-overseen sale to a Texas-based firm.
TreeTown USA, a privately owned landscaping business headquartered in Houston, said last week that it signed a definitive purchase agreement to acquire the company, whose products are used by landscape contractors, commercial property owners, rewholesalers and retailers.
The combined firm’s assets will total 16 farms in California, Texas and Florida, including more than 4,000 acres in production. It’s TreeTown’s first acquisition in the state.
Village Nurseries has locations for growing and selling plants in Orange, Huntington Beach, Buena Park and Brea, and its assets also include a midsized building on North Main Street in Orange that holds its headquarters.
A bulk of its land holdings are outside of Orange County and include large plant-growing sites in Escondido, Perris and Pauma Valley.
The company employs about 900 people and reported nearly $67 million in sales and net income of $5.1 million in 2015, according to court records pertaining to the planned sale. About 200 employees are based in OC, according to Village Nurseries President Dave House.
Terms of the impending deal weren’t disclosed by the two parties.
Court documents from this year suggest a deal in the $74 million range was expected. The transaction would likely include the assumption of nearly $50 million in debt, according to the documents.
A TreeTown statement said the company anticipated the purchase to close by the end of last month. The deal is “one of the largest strategic nursery acquisitions in recent history,” it says.
Village Nurseries will continue to operate under its trade name and be led locally by House, who’s worked with the company for more than 30 years, including 14 years at the top spot.
The sale “allows us to partner with one of the industry’s leading wholesale nurseries and positions us to expand our geographic reach to industry professionals seeking the wide breadth of trees and shrubs we offer, many of which are patented or exclusive and not readily available at other wholesale nurseries,” House said.
Receivership
Village Nurseries has been operating out of receivership for the better part of a year. It was last owned by an affiliate of local developer and homebuilder Jim Baldwin, whose varied financial issues—involving home development sites in San Diego, a luxury home in Laguna Beach, and a mega-yacht he no longer owns, among other properties—have been frequent sources of litigation over the past decade.
Baldwin was the guarantor for Village Nurseries’ debt, which included nearly $37 million owed to Bank of the West as of May, according to court documents, which indicated the company was in “technical default” under its loan agreement.
Baldwin’s financial difficulties have “impeded, and continue to impede, the future growth of the company,” which prompted attempts to sell Village Nurseries, court documents said.
Village Nurseries’ assets received several inquiries from interested buyers over the past year, including private equity firms and other local firms. The receivers also reached out to Al Baldwin, head of Newport Beach homebuilder Baldwin & Sons, to gauge his interest in buying the company, according to the court records.
Al Baldwin is the brother of Jim Baldwin. The brothers split their business interests in the 1990s and set up separate companies.
The completion of the sale to TreeTown comes during improving economic conditions in the nursery business, according to House.
“We continue to benefit from the recovery in the housing market and the construction market,” he said last week. Customer interest in drought-tolerant plants, succulents in particular, has recently changed buying habits, he said.
Lowe’s is the company’s biggest customer, although much of its business comes from sales to landscaping subcontractors.
TreeTown said its financial adviser in the acquisition was Armory Securities LLC and that its lead legal adviser was Jannol Law Group.
Village Nurseries’ financial adviser was B. Riley & Co. and its lead legal adviser Shulman, Hodges & Bastian LLP.
Faith Devine with Carlsbad-based Fraud Law Group acted as the court-appointed receiver during the sale process.
