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View Full Version : Lesco-John Deere Buy out


Ric
05-04-2007, 11:17 AM
Yesterday 5/03/07 The Lesco stockholders voted on rather to accept or reject the John Deere buy out offer. A public announcement is to be made on Monday 5/07/07 as to the vote results.

There are questions because one of the holding companies that owns about 25% of the stock has been making noises that they would vote against the take over.

Stay tuned for late breaking news as it occurs.

MnLefty
05-04-2007, 02:01 PM
Basically a done deal. 78% yes vote, with about 67% of eligible shares voting. There's a brief note here.
http://www.crainscleveland.com/apps/pbcs.dll/article?AID=/20070503/FREE/70503013/1003&Profile=1003

Ric
05-04-2007, 03:00 PM
Basically a done deal. 78% yes vote, with about 67% of eligible shares voting. There's a brief note here.
http://www.crainscleveland.com/apps/pbcs.dll/article?AID=/20070503/FREE/70503013/1003&Profile=1003

Mnlefty

It is my understanding this was the Cut off date for stockholder voting. JDL made a great deal in the fact they have paid less than the wholesale value of Lesco's inventory. However they also purchased Lesco's Liabilities. Lesco has been losing money for many years now and this buy out saved them from Bankruptcy. Yesterday I was in the local Lesco Store for the first time in quite a while. The pallets were stacked to the ceiling with product. I have never seen this store stacked so full of product in the 20 years I have known of it. My guess is this product is on consignment and JDL will be paying the bill.

BTW I believe in the next few years the Lesco name will totally disappear in favor of the JDL name. There may be a few things I will miss about Lesco, But I can't think of any. I feel Lesco has given me a few raw deals in the past and won't miss that.

Nathan Robinson
05-04-2007, 04:12 PM
lesco has much better prices. Our Lesco cant keep products in. Lescos name will still be around in 3 years. The name is well known and its in JDL best interest to keep the name.

upidstay
05-04-2007, 05:07 PM
JDL would be foolish to get rid of the Lesco name. Sort of like buying Coca Cola and changing it to Bob's soda. Makes no sense. Ric, you seem very well versed in the inner workings of Lesco. Where do you get your info? Lesco was not on the verge of bankruptcy, just had been struggling. It's been trying to get bought out for several years now. Selling off the manufacturing operations was one step in that direction. There were rumors of a buy out for a while now, and JDL finally made its bid. As far as product stracked to the roof, it depends on when you go into one. My local stores start off the various seasons (pre-emergant, grub, etc.) loaded for bear, and gradually sell out. One store in my area sold 30 pallets of dimension in one day last week!

Ric
05-04-2007, 05:45 PM
JDL would be foolish to get rid of the Lesco name. Sort of like buying Coca Cola and changing it to Bob's soda. Makes no sense. Ric, you seem very well versed in the inner workings of Lesco. Where do you get your info? Lesco was not on the verge of bankruptcy, just had been struggling. It's been trying to get bought out for several years now. Selling off the manufacturing operations was one step in that direction. There were rumors of a buy out for a while now, and JDL finally made its bid. As far as product stracked to the roof, it depends on when you go into one. My local stores start off the various seasons (pre-emergant, grub, etc.) loaded for bear, and gradually sell out. One store in my area sold 30 pallets of dimension in one day last week!

Upidstay

The other reply is on my ignore list so I can only answer your reply. You make a great analogy with Coca Cola, however I believe you have the order reversed. Look at this way, If Coca Cola bought out Bob's soda pop they sure wouldn't keep the name and IMHO neither will John Deere. But rather than argue about it just wait and see. Just remember who Told You So.

americanlawn
05-04-2007, 07:50 PM
Been buying from LESCO since 1990. They have always treated me with great professionalism and respect. We also saved much money over the years because of them. They're top notch in my book. I hope the LESCO name never goes away.

John Deere is high priced on equipment, parts and service, but great quality.

philk17088
05-04-2007, 10:00 PM
lesco has much better prices. Our Lesco cant keep products in. Lescos name will still be around in 3 years. The name is well known and its in JDL best interest to keep the name.
I have consistently been able to get better prices on my materials from other suppliers other than lesco. I I have nothing against them but business wise it doesn't make sense to me to use them. I will use them for some parts for spreaders and such only because I have to.

tremor
05-05-2007, 12:04 AM
A company cannot lose $50 Million three years in a row & remain solvent.
Theirs is an interesting business model. The cost of that model is astounding. Lately they seem to be having trouble getting their arms around that cost so they've failed to recoup it. They'll quote certain clients below their cost to keep market share & then thoroughly hose others. Deere will need to make serious changes if they're to fully realize the potential in this venture.

I agree with Ric that the JDL name will ultimately displace LESCO on the packaging. Most industry insiders agree.

It will be interesting to say the least.

green horizons
05-05-2007, 11:30 AM
I'm no expert and I don't play one on tv, but equipment-wise, the Lesco name is as good as dead. Deere makes equipment already. Kinda silly to compete with yourself. The fert. might, might retain Lesco name, since it's the "insustry standard" (according to Lesco). As for Lesco, I like their fert. and their prices locally are competitive, but I cannot stand the "what's my price today" game. They can never give me a straight answer. I buy 2 pallets on Monday and on Wednesday I need more... "What's my price today?". The southside calls, quotes price, then the northside hoses me for $5 more per bad and pretends he's doing me a favor. Lesco: goodbye, good riddance.

Ric
05-05-2007, 07:06 PM
A company cannot lose $50 Million three years in a row & remain solvent.
Theirs is an interesting business model. The cost of that model is astounding. Lately they seem to be having trouble getting their arms around that cost so they've failed to recoup it. They'll quote certain clients below their cost to keep market share & then thoroughly hose others. Deere will need to make serious changes if they're to fully realize the potential in this venture.

I agree with Ric that the JDL name will ultimately displace LESCO on the packaging. Most industry insiders agree.

It will be interesting to say the least.

Steve

IMHO You are the most knowledgeable Pesticide person to post on Lawnsite over the years and What I would consider an Industry insider. You have worked in management positions for Lesco and should have a handle on what is happening in the industry in general and Lesco in particular. But like all of the Sharp people that worked at Lesco at one time or another you have moved on to greener pastures.

The Fertilizer Industry in general has a long history of ups and downs. Back in the 70's the farmers marched on Washington and it just about killed many manufactures. Many of the big boys have been bought and sold several times. Lesco's sell out is therefore nothing new to this industry. The name change will be nothing new either.

My current suppliers will pull up once a week in a 18 wheeler to make my delivery. They have driven from a well stocked warehouse 50 to 100 miles away. Before or after my delivery they have dropped off products to Farmers, Ranchers and Citrus groves as well as other CPOs. That one warehouse services the same area that over 10 lesco store do. IMHO Lesco's marketing strategy I believe was their down fall. They tried to do a retail Fert & Squirt supplier with stores on every corner. Scotts and Ortho sold thur established Big Box to local hardware stores and are still afloat because of the lack of overhead of a store front and extra employees. Advertising expense which might equal the cost of a store front is done at windows of opportunity and is effective. John Deere should consolidate the stores with in a few years and by selling a large line of product and fewer store, turn a nice profit. The Fert & Squirt products will be a profitable side line to John Deere at that point. It will also be a drawing card for equipment and other product up sells. John Deere might lose some big but less profitable customers. They will pickup more small customers at a higher margin.