Scotts Seaboard Corp., the parent company of Scott's Home and Garden Centers, announced yesterday that General Host Corp. will acquire the 17-store home-center chain for $5.4 million and make it part of General Host's rapidly growing Frank's Nursery and Crafts chain.

Scott's, which has been fighting an uphill battle against the more dominant do-it-yourself stores in the area, said that General Host, a Connecticut food processor and specialty retailer, will make a tender offer within the next five days for all of the company's 1.8 million outstanding shares at $3 a share -- twice the price of the stock before the agreement was announced.

As a result of the announcement, Scotts' stock climbed $1.12 to close at $2.67 a share yesterday.

General Host, which owns a number of food-processing companies including Hickory Farms of Ohio, said it plans to use the acquisition to accelerate its growth into the nursery and craft businesses.

Two years ago, General Host acquired the Detroit-based Frank's Nursery & Craft stores. Since that acquisition, General Host has made it clear that it wants to establish Frank's as a nationwide chain, growing from its present 104 stores to about 500 by 1990. Sales at the garden centers already account for more than half of General Host's revenue, which totaled $564 million for its latest fiscal year ended Jan. 31, 1985.

There are currently six Frank's stores in the Washington-Baltimore area.

Over time, General Host said, it expects to change not only the name of Scott's stores but also the merchandise, from a do-it-yourself home center store to a nursery and craft store.

About one-third of Frank's stores are devoted to selling goods for knitting, macrame', crocheting, needlework and other handicrafts. The remaining space is for lawn and garden supplies.

"It's a first-class operation," said Richard Morey, publisher and president of Brantwood Publications Inc., which publishes horticultural trade magazines. "It is the larget retail garden operation in the U.S. and handles good-quality materials."

The sale of Scotts, a 24-year-old home-center chain, is a sign of the highly competitive nature of the do-it-yourself market in the Washington-Baltimore area, the headquarters of Hechinger Co.

Within the past two years, several major chains, including W. R. Grace Co.'s Channel Stores and Rickel, have entered the area in the hope of gaining some of Hechinger's share of the lucrative market.

"The competitors in this market are very tough," said Eliot H. Benson of Ferris & Co. Inc.

"Scott's has had an unexciting record," he added, noting that on $35 million in sales for the fiscal year ended Jan. 31, 1984, its earnings were $1.1 million.

For its 1985 fiscal year, the company's profits dropped to $200,000 on sales of $37.4 million.

Scotts President Earl R. Halterman acknowledged yesterday that stiff competition was one of the chain's biggest problems.

"It's a question of the financial resources available. If you have a war chest, like a W. R. Grace or a Hechinger, many things can be done. Through the ages, it didn't make it as easy for us" that Scotts' pockets were not as deep as its competitors.

For the past few years, Scotts had been hoping to expand its operations beyond the 17-store chain.

In March, the company hired the Baltimore investment house of Legg Mason Wood Walker Inc. to seek financial advice on how to obtain capital to fund its expansion and renovation plans. Legg Mason also looked at other alternatives, including merger.

"The deal really jelled last week," said General Host's general counsel, Robert Kuhbah. General Host To Buy Scott's Home Centers Major Growth Eyed By Caroline E. Mayer Washington Post Staff Writer

Scotts Seaboard Corp., the parent company of Scott's Home and Garden Centers, announced yesterday that General Host Corp. will acquire the 17-store home-center chain for $5.4 million and make it part of General Host's rapidly growing Frank's Nursery and Crafts chain.

Scott's, which has been fighting an uphill battle against the more dominant do-it-yourself stores in the area, said that General Host, a Connecticut food processor and specialty retailer, will make a tender offer within the next five days for all of the company's 1.8 million outstanding shares at $3 a share -- twice the price of the stock before the agreement was announced.

As a result of the announcement, Scotts' stock climbed $1.12 to close at $2.67 a share yesterday.

General Host, which owns a number of food-processing companies including Hickory Farms of Ohio, said it plans to use the acquisition to accelerate its growth into the nursery and craft businesses.

Two years ago, General Host acquired the Detroit-based Frank's Nursery & Craft stores. Since that acquisition, General Host has made it clear that it wants to establish Frank's as a nationwide chain, growing from its present 104 stores to about 500 by 1990. Sales at the garden centers already account for more than half of General Host's revenue, which totaled $564 million for its latest fiscal year ended Jan. 31, 1985.

There are currently six Frank's stores in the Washington-Baltimore area.

Over time, General Host said, it expects to change not only the name of Scott's stores but also the merchandise, from a do-it-yourself home center store to a nursery and craft store.

About one-third of Frank's stores are devoted to selling goods for knitting, macrame', crocheting, needlework and other handicrafts. The remaining space is for lawn and garden supplies.

"It's a first-class operation," said Richard Morey, publisher and president of Brantwood Publications Inc., which publishes horticultural trade magazines. "It is the larget retail garden operation in the U.S. and handles good-quality materials."

The sale of Scotts, a 24-year-old home-center chain, is a sign of the highly competitive nature of the do-it-yourself market in the Washington-Baltimore area, the headquarters of Hechinger Co.

Within the past two years, several major chains, including W. R. Grace Co.'s Channel Stores and Rickel, have entered the area in the hope of gaining some of Hechinger's share of the lucrative market.

"The competitors in this market are very tough," said Eliot H. Benson of Ferris & Co. Inc.

"Scott's has had an unexciting record," he added, noting that on $35 million in sales for the fiscal year ended Jan. 31, 1984, its earnings were $1.1 million.

For its 1985 fiscal year, the company's profits dropped to $200,000 on sales of $37.4 million.

Scotts President Earl R. Halterman acknowledged yesterday that stiff competition was one of the chain's biggest problems.

"It's a question of the financial resources available. If you have a war chest, like a W. R. Grace or a Hechinger, many things can be done. Through the ages, it didn't make it as easy for us" that Scotts' pockets were not as deep as its competitors.

For the past few years, Scotts had been hoping to expand its operations beyond the 17-store chain.

In March, the company hired the Baltimore investment house of Legg Mason Wood Walker Inc. to seek financial advice on how to obtain capital to fund its expansion and renovation plans. Legg Mason also looked at other alternatives, including merger.

"The deal really jelled last week," said General Host's general counsel, Robert Kuhbah.