Elevation assumed Scott’s remaining facilities & corporate office leases, and Scott’s received net cash proceeds of $0.5 million. The companies also agreed to enter into a manufacturing and supply agreement under which Elevation will manufacture Scott’s products during the transition.
Mark Goldstein, CEO and chairman of Scott’s, said, “We are excited to have closed this transaction, which is a huge step towards an outsourced operations model. As we begin selecting our long-term partners, our goal is to have both production and distribution fully outsourced by the end of the third quarter 2020. This will allow us to focus on the growth and marketing of our high-quality, high-value brands.”
Kevin Paprzycki, CFO, added, “Our operational team has set us up well for the next phase of this strategic transition by increasing production and building finished product inventories across our brands. As we phase in our outsourced production and reduce overall inventory levels over the course of 2020, we are positioning ourselves to see financial benefits from lower production and distribution costs in 2021.”