SiteOne begins stock trading
Two months after the market’s bottom, the IPO market is showing precious little signs of life.
Absent a red-hot IPO market, we are down to niche plays, and there is an interesting one today: SiteOne Landscape Supply priced 10 million shares at $21 last night, the midpoint of the $20 to $22 price talk, and will begin trading this morning at the NYSE.
SiteOne, which came out of Deere, is the largest distributor of landscape products in the United States. Fertilizer may not sound like a hot business, but it’s right in the middle of the home DIY thing that Home Depot and Lowe’s plays off of. Their customers are primarily residential and commercial landscape professionals. They do the design and maintenance for lawns, gardens, golf courses and other outdoor spaces.
Don’t laugh. It’s a $16 billion business. SiteOne has $1.5 billion in revenue, so they own almost 10 percent of the business and are growing through acquisitions and organically (7 percent a year).
And it’s a recurring business. You have to put down fertilizer every year, after all. They are also expanding into peripheral businesses like LED lights.