CD&R seals $465m carve-out amid fundraise

Clayton Dubilier and Rice will acquire John Deere Landscapes, a division of listed agricultural machinery company John Deere, for $465 million.

John Deere Landscapes provides irrigation, landscape lighting, nursery and turf maintenance supplies from more than 400 locations in the US and Canada. The division is housed within John Deere’s Agriculture and Turf segment and bills itself as the largest North American distributor of landscaping products, with over $1 billion in annual revenue. John Deere will initially retain a 40 percent stake in the new standalone company.

“The new company should benefit from a recovery in residential and commercial construction activity as well as through the meaningful value creation opportunities available to drive the business forward,” Ken Giuriceo, partner at CD&R, said in a statement.

John Deere was founded in 1873 and continues to provide products for farmers, ranchers, landowners, builders and loggers. The company focuses on six key areas in which at least 75 percent of the world’s future growth will occur: the US, Canada, Europe, Brazil, Russia, India, and China, according to its website.

UBS Loan Finance, ING Capital and Natixis will provide financing in connection with the transaction.

The investment from CD&R’s Fund VIII marks the firm’s third investment of 2013 and comes as CD&R seeks $5 billion for its ninth buyout fund. CD&R had raised close to $3 billion as of August, according to a source with knowledge of the situation. Documents filed with the US Securities and Exchange Commission in August stated the firm had collected $2.65 billion for Fund IX, on top of which CD&R will commit $250 million in the form of a general partner commitment, according to four sources who have seen the private placement memorandum for the fund.

CD&R has managed more than $18 billion in 56 US and European businesses since its founding in 1978. The combined companies represent more than $90 billion of transaction value.