Information on the Target

Fast Growing Trees (FGT), headquartered in Charlotte, North Carolina, is a prominent e-commerce direct-to-consumer provider specializing in trees, shrubs, and other live goods. The Company operates three well-known branded websites: fastgrowingtrees.com, brighterblooms.com, and plantingtree.com. FGT collaborates with numerous growers across North America to source its diverse product range and manages its own nursery, ensuring a robust inventory of hundreds of thousands of live plants ready for direct shipment to an expanding and loyal customer base.

Industry Overview in the Target's Specific Country

The e-commerce sector, particularly focused on live goods, has witnessed significant growth in the United States, propelled by a shift in consumer shopping habits. This transformation has led to increased demand for convenient access to quality plants, reflecting a broader trend of online retail expansion across various categories. Consumers are increasingly turning to online platforms for their gardening and landscaping needs, driven by the ease of browsing and purchasing from the comfort of their homes.

Moreover, the pandemic has further accelerated this trend, resulting in more individuals taking up gardening and home improvement projects, thereby enhancing the appeal of services like those provided by FGT. As people continue to invest in their outdoor spaces, the market for live goods stands to benefit tremendously.

While traditional brick-and-mortar nurseries have faced challenges, companies like FGT that leverage e-commerce effectively have thrived. By optimizing their online presence and ensuring customer satisfaction through enhanced marketing strategies and operational improvements, these companies have emerged as leaders in a rapidly evolving landscape.

The Rationale Behind the Deal

Summit Park's decision to sell Fast Growing Trees to Berkshire Partners highlights the successful transformation and significant growth of the Company during its ownership period. Under Summit Park's stewardship, FGT's revenue and EBITDA more than quadrupled within three and a half years, thanks to strategic enhancements in management practices, supply chain optimization, and marketing sophistication. This strategic exit aligns with Summit Park's focus on delivering value to its investors and capitalizing on an advantageous market position for FGT.

Information About the Investor

Berkshire Partners is a renowned investment firm known for its disciplined approach to long-term value creation in medium-sized businesses across various industries. With a focus on partnership and operational excellence, Berkshire Partners provides support to its portfolio companies, ensuring they have the resources and strategic guidance needed to scale and thrive in competitive markets. Their participation, alongside Cove Hill Partners as a minority investor, further solidifies FGT's position for future growth.

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From an analytical perspective, this transaction appears to be a strong strategic investment for Berkshire Partners. Fast Growing Trees has demonstrated robust growth and has established itself as a clear leader in the e-commerce live goods market. The ongoing shift in consumer behavior towards online shopping positions FGT advantageously for sustained future growth, which aligns with Berkshire's investment philosophy.

Moreover, the experienced management team at FGT, with a proven track record of operational excellence and a commitment to innovation, is likely to continue driving value. Their collaborative relationship with Summit Park further indicates that they are well-prepared for the next phase of growth with new partners.

The deal not only reflects Summit Park's successful exit strategy but also offers Berkshire Partners a compelling opportunity to invest in a thriving sector. As gardening and home improvement remain in vogue, FGT is well-placed to capitalize on ongoing market trends, suggesting this acquisition could yield significant returns.

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