Griffon Exits AMES in $850M Deal, Bets on Hunter Industries Alone

Griffon Corporation is out of the garden tools business — mostly. The New York-based conglomerate closed a joint venture with Canadian private equity firm ONCAP on June 6, handing over operational control of its AMES North America division in exchange for $625 million in cash and a 29% minority stake in the newly formed entity. ONCAP contributed its own portfolio company, Venanpri Tools, to the deal, which values the combined business at roughly $850 million.

The transaction marks Griffon's most decisive step yet in its years-long effort to simplify its portfolio. Once a sprawling collection of brands spanning defense, construction products, and consumer goods, the company now holds just two operating businesses: Hunter Industries, a maker of residential and commercial irrigation systems, and US Hose Corporation, a government contractor supplying hoses and fluid transfer systems to the Department of Defense.

AMES, which Griffon acquired piecemeal over the past two decades, produces shovels, rakes, wheelbarrows, and other hand tools sold primarily through Home Depot, Lowe's, and Tractor Supply. It's a profitable, mature business — but one that's been losing relevance inside Griffon's corporate structure. The company's lawn and garden segment generated $445 million in revenue for fiscal 2025, a 3% decline from the prior year, and operating margins have compressed as big-box retailers consolidated shelf space and private-label brands ate into pricing power.

ONCAP, meanwhile, gets scale. Venanpri Tools, which it backed in 2023, makes pruning shears, loppers, and other cutting tools under brands like Fiskars-licensed products and proprietary lines sold across North America. The combination with AMES creates a vertically integrated platform with manufacturing in the U.S., Mexico, and China, and a customer base that overlaps almost completely. The deal also gives ONCAP a shot at the private equity playbook it knows well: buy a category leader, bolt on a smaller competitor, rationalize costs, and either sell to a strategic or take it public in three to five years.

Griffon's $625 million payday isn't just an exit — it's a liquidity event the company badly needed. The conglomerate carried $1.48 billion in total debt as of March 31, 2026, and its stock has traded sideways for three years as investors questioned whether a holding company structure still made sense in 2026. CEO Ronald Kramer has spent the past 18 months telegraphing that Griffon would either spin off business units or sell them outright, and this deal delivers on that promise.

But here's the tension: Griffon retains 29% of the new entity, which means it's still exposed to the garden tools market even as it claims to be exiting it. The minority stake is non-controlling, so Griffon won't consolidate the joint venture's financials on its balance sheet. It also won't have operational influence — ONCAP holds 71% and gets full management control. That structure is common in private equity roll-ups where the seller wants optionality on a future liquidity event but doesn't want to run the business anymore.

The real question is what Griffon does with the cash. The company hasn't disclosed its capital allocation plans yet, but the options are predictable: pay down debt, buy back stock, or reinvest in Hunter Industries, which has been the growth engine of the portfolio. Hunter posted $570 million in revenue for fiscal 2025, up 7% year-over-year, driven by residential construction recovery and municipal infrastructure spending on water conservation systems. If Griffon doubles down there — either through M&A or capacity expansion — the AMES exit starts to look like a strategic pivot rather than a distress sale.

If it just pays down debt and waits, investors will smell a liquidation in slow motion.

ONCAP doesn't talk much publicly, which is typical for a Canadian mid-market PE firm with $7 billion in assets under management. But its playbook here is visible: it bought Venanpri in 2023, likely at a valuation in the low-to-mid single-digit EBITDA multiple range, and has spent the past three years prepping it for a larger combination. Venanpri's management team stays in place post-deal, and ONCAP's operating partners — former executives from Home Depot's supplier network and Black & Decker's outdoor tools division — are now running integration.

The combined entity doesn't have a public name yet, which suggests branding decisions are still being finalized. But the operational logic is clean: AMES has scale in long-handle tools (shovels, rakes, hoes), and Venanpri has scale in cutting tools (shears, loppers, saws). Both rely on the same retail channels. Both source from overlapping supplier networks in Asia. And both have been squeezed by the same margin pressures as big-box retailers demand price concessions and Chinese manufacturers offer white-label alternatives at 30% discounts.

ONCAP's bet is that a combined platform can extract $40-50 million in cost synergies over 24 months by consolidating manufacturing, reducing SKU complexity, and renegotiating supply contracts. If it hits those targets, the business could generate $120-140 million in EBITDA on $900 million in revenue, putting it in range for a strategic sale to a larger consumer goods conglomerate or a take-private of a struggling public competitor.

The risk is execution. Garden tools is a low-growth, commoditized category where the only real differentiation is brand equity — and even that erodes when retailers push their own private labels. AMES has brand recognition, but it's not Stanley or DeWalt. If ONCAP can't hit its synergy targets, or if a recession dents home improvement spending, the multiple it paid starts to look rich.

This deal fits a pattern. Over the past 36 months, PE firms have been quietly buying up unsexy industrial and consumer hardware businesses — locks, fasteners, hand tools, outdoor equipment — betting that consolidation can create value even in flat markets. The logic: these businesses throw off cash, have loyal distribution channels, and trade at depressed multiples because public investors don't care about 3% revenue growth. Add in cost synergies, a bit of pricing discipline, and a longer hold period, and you can generate 15-20% IRRs without needing heroic top-line assumptions.

Griffon is now, for all practical purposes, a two-business company. Hunter Industries is the crown jewel — a market leader in residential and commercial irrigation systems with exposure to long-term secular tailwinds in water scarcity and infrastructure spending. US Hose is smaller, generates lumpy revenue tied to defense procurement cycles, but carries high margins and government contract visibility that public investors generally like.

The AMES exit removes the weakest performer from the portfolio, but it also removes diversification. Griffon's revenue mix is now heavily skewed toward Hunter (roughly 70% of consolidated sales post-deal) and a niche defense contractor (30%). If residential construction slows or if Congress cuts defense spending, Griffon doesn't have much of a buffer.

That concentration risk is why some analysts have been pushing Griffon to just split the company entirely: spin Hunter into a standalone public irrigation company, sell or spin US Hose, and return capital to shareholders. The AMES deal could be a prelude to that. Or it could be Griffon saying: we're keeping the best assets, and we're done pretending to be a conglomerate.

The company's next earnings call, scheduled for late July, will matter more than usual. Investors will want clarity on capital allocation, debt paydown timelines, and whether Griffon sees its future as an operating company or a capital allocator. If Kramer signals that more portfolio moves are coming, the stock will react. If he pivots to growth investments in Hunter, that's a different story — and a bet that irrigation is a better business to be in than garden tools.

He's probably right. But the execution risk doesn't go away just because you sold the slow-growth division.

Griffon's $1.48 billion debt load is manageable but not comfortable. Net leverage sits around 3.2x EBITDA, which is fine for an industrial holding company but leaves little room for error if Hunter's growth stalls. The $625 million from the AMES deal could cut that leverage to under 2.5x if Griffon applies all of it to debt retirement — a move that would give the company flexibility to either pursue M&A in irrigation or weather a downturn without covenant concerns.

But debt paydown is boring, and Griffon's investor base skews toward activists and value funds who want to see capital returned or redeployed, not just delevered. Expect tension on the next few earnings calls if management doesn't articulate a clear use of proceeds beyond vague references to "maintaining financial flexibility."

Griffon isn't alone in this. The past 18 months have seen a wave of diversified industrials and consumer holding companies breaking themselves apart: Roper Technologies spinning off its process technologies business, Danaher splitting its environmental and applied solutions units, ITW shedding non-core product lines. The logic is the same everywhere: investors don't value complexity, and the conglomerate discount is real. A sum-of-the-parts analysis almost always shows that standalone businesses would trade at higher multiples than the combined entity.

For Griffon, the AMES exit is the first domino. If the company follows through with additional portfolio moves — especially a Hunter spin or a US Hose sale — it validates the thesis that the holding company structure no longer works. And if private equity keeps rolling up the assets that conglomerates are shedding, it raises a harder question: were these businesses ever a good fit for public markets in the first place, or are they better off in PE hands where patient capital and operational focus replace quarterly earnings pressure?

The answer probably depends on whether you're a Griffon shareholder or an ONCAP LP.

Griffon was advised by Morgan Stanley as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel. ONCAP worked with BMO Capital Markets and Torys LLP. The transaction closed on June 6, 2026, following regulatory approval from the Committee on Foreign Investment in the United States (CFIUS), which reviewed the deal due to AMES's manufacturing footprint in defense-adjacent supply chains. CFIUS clearance came through without conditions, suggesting no national security concerns were flagged.

Financing for the transaction came from a combination of ONCAP's Fund V capital and a $350 million senior secured credit facility led by Bank of Montreal. The credit facility is structured as a revolver and term loan, with the term loan earmarked for growth capex and working capital optimization. ONCAP has indicated it expects to refinance the facility within 18-24 months, likely after achieving initial synergy targets and demonstrating cash flow stability to lenders.

Griffon's stock barely moved on the news — up 2% in the two trading days following the announcement, then flat. That muted reaction tells you what investors think: this was expected, priced in, and not transformational on its own. The real test comes in the next six months, when Griffon either deploys the proceeds in a way that creates value or doesn't.

For ONCAP, the clock starts now. The firm has three years, maybe four, to prove it can run AMES and Venanpri as a scaled platform and either sell to a strategic buyer or take the company public. The most likely acquirers — Stanley Black & Decker, Techtronic Industries (owner of Milwaukee and Ryobi), or Fiskars Group — have all been active in M&A over the past 24 months, and a $1 billion garden tools business with rationalized costs would fit their portfolios cleanly.

If none of those buyers materializes, ONCAP will need to convince public markets that a $1 billion garden tools company deserves a 10x EBITDA multiple. That's a harder sell in 2029 than it was in 2019, but it's not impossible — especially if the business is throwing off $100 million in free cash flow and has a clear growth story in e-commerce and international expansion.

For now, though, the story is simpler: Griffon got out, ONCAP got in, and the garden tools industry just got a little more consolidated. Whether that consolidation creates value or just shifts who owns the margin compression risk is the question the next three years will answer.

A few things didn't make it into the press release — but matter. First: what multiple did ONCAP pay? The $850 million enterprise value implies a purchase price in the range of 7-8x EBITDA if you assume the combined business generates $110-120 million in earnings. That's not cheap for a mature, low-growth category, but it's defensible if ONCAP hits its cost synergy targets and the business scales to $140 million in EBITDA within 24 months.

Second: what are the governance rights attached to Griffon's 29% stake? Does it have board representation? A drag-along provision in a future sale? The ability to force a liquidity event after a certain period? The press release doesn't say, which means those terms are either still being finalized or were negotiated in a way that favors ONCAP's control. If Griffon has minimal governance rights, its minority stake is essentially a passive bet on ONCAP's execution — not a meaningful influence lever.

Third: what happens to the AMES brand? Griffon owned the trademark, and the press release doesn't clarify whether it was transferred to the joint venture or licensed. If it's a license, Griffon retains some optionality to reclaim the brand in a future scenario. If it's a transfer, ONCAP owns it outright. Brand ownership matters less in categories where retailers control distribution, but it's still a signal of how permanent this exit is intended to be.

And finally: is this the last deal, or the first? If Griffon follows with a Hunter spin or a US Hose sale in the next 12 months, the AMES transaction looks like the opening move in a full portfolio breakup. If nothing else happens, it's just a one-off exit of an underperforming asset. The difference between those two scenarios is the difference between a stock that re-rates 30% higher and one that drifts sideways for another three years.

Griffon's Q3 earnings call in late July will be the first test. Analysts will push for specifics on capital allocation, debt paydown timelines, and strategic priorities. If CEO Ronald Kramer signals that more portfolio moves are coming, the market will price in optionality. If he pivots to organic growth narratives around Hunter and US Hose, investors will either buy the story or sell the stock depending on whether they believe the remaining businesses can outgrow the capital structure.

For ONCAP, the next 12 months are about proving the integration thesis. Key milestones: achieving $20-25 million in run-rate cost synergies by Q4 2026, launching a unified product portfolio under a single brand architecture by early 2027, and securing contract renewals with Home Depot and Lowe's that reflect the combined entity's scale. If those boxes get checked, ONCAP will start shopping the business to strategic buyers by mid-2027. If they don't, the exit timeline stretches, and the IRR math gets harder.

The broader market should watch whether this deal triggers more PE interest in unsexy industrials and consumer hardware. If ONCAP's bet pays off, expect copycats. If it doesn't, expect a pause in roll-up activity while firms reassess whether consolidation alone can overcome category headwinds.

Either way, Griffon just got simpler. Whether it got better is still an open question.