Hines Horticulture Hopes to Grow With Stock
Hines Horticulture Inc., a provider of plants to mass retailers such as Home Depot Inc. and Wal-Mart Stores Inc., plans to offer stock to the public for the first time in an effort to raise an estimated $92 million.
The Irvine company’s documents on the initial public offering, filed Thursday with the Securities and Exchange Commission, did not disclose the number, price or percentage of its common shares being offered to the public.
The top value for the offering, including sales by unidentified shareholders, was estimated only to calculate the SEC filing fee.
With $201 million of sales in 1997, Hines is North America’s largest peat moss provider and one of its largest plant-growers. Chairman Douglas D. Allen and Chief Executive Stephen P. Thigpen head the company, the filing said.
The company produces potted plants and peat moss-based soil for garden stores and mass retailers. Home Depot is its top customer, according to the filing.
Hines cultivates “one of the broadest assortments of container-grown plants in the industry,” from eight nurseries in California, Oregon, Pennsylvania, South Carolina and Texas, the filing said. Hines gets peat moss from 48,500 acres of bogs in Canada as well.
Hines expects to raise $68.8 million from its portion of the IPO, after expenses. Of that, about $47 million will go to redeem $42 million in notes, plus interest. Another $15.6 million will be used to prepay mortgage loans, while the remaining $6.1 million will go for capital spending, according to the filing.
The company reported sales of $48.2 million in the first quarter of this year, up about 1% from $47.8 million in the same quarter the year before.
However, increased operating and interest expense led to a $219,000 loss in the first quarter, compared to earnings of $280,000 in the year-ago quarter, according to the filing.
Madison Dearborn Capital Partners LP of Chicago is the top shareholder of Hines. No shareholders’ stake before or after the offering was disclosed in the filing.
Allen, the company’s 55-year-old chairman, will serve in a nonexecutive capacity after the IPO, the filing said.
Lehman Brothers will underwrite the IPO, with BT Alex. Brown and BancAmerica Robertson Stephens. Hines plans to have the shares listed for trading on the Nasdaq stock market under the symbol HORT.
