|
Our Travel Schedule:
We are currently planning to attend the following events:
Green Industry Conference,
Oct. 22-25, Louisville
Landscape Management Lawn Care Forum, November 13-14, Orlando
Lawncare Summit, January 27-29, Nashville
Green Industry Great Escape, Feb. 27-March 1, Anaheim
If you are attending any of these events and would like to meet, please contact us and we will schedule a time.
|
|
The Principium Group provides advisory services related to mergers & acquisitions, exit planning and capital formation to a variety of middle market and small businesses, with a focus on the green industry. Our professionals have assisted business owners in hundreds of transactions.
For buyers, Principium provides assistance and counsel in strategic planning, identifying potential acquisition targets, due diligence and planning for successful integration of acquisitions.
For sellers, Principium provides assistance and counsel in evaluating strategic alternatives, identifying and negotiating with potential acquirers and assisting with transactions from due diligence through the closing process.
In order to provide the highest quality service, we maintain relationships with other professionals serving the green industry and can access those professionals to supplement our internal resources. No matter how large or small your business may be, we have the resources to serve you well.
We understand that the decision to buy or sell your business is a profound one, and we pledge to work with you in a professional and confidential manner while we help you navigate this often confusing process.
Whether you have immediate plans to buy or sell a business or may sometime in the future as part of an exit planning strategy, we would welcome the opportunity to talk with you about your business.
|
|
The information included in this newsletter is derived from publicly available sources. Our intent is to give a perspective on the industry taken as a whole. The inclusion of a transaction in this newsletter does not imply that The Principium Group acted as an advisor to either of the parties to the transaction. It is the policy of The Principium Group always to maintain the confidentiality of its client relationships. For those transactions in which The Principium Group did play a role, the information included herein is still limited to that available through public sources.
Entire contents copyright 2013 The Principium Group, Inc.
|
|
|
|
From the Editor
As the year progresses, we are seeing a definite uptick in the interest in merger & acquisition transactions within the green industry, particularly in the landscape maintenance segment. Whether that will translate into more actual transactions remains to be seen, but we do expect 2013 to be a stronger year than 2012 and 2014 to be stronger yet, but still below the high level of activity a number of years ago.
 This month, we focus on the impact on the M&A market of reports that Leonard Green and Partners, the majority owner of The Brickman Group, is putting Brickman on the market. While this move has been anticipated, it still has the potential to shuffle the playing field and to test the interest level of private equity in the industry. Read below and then standby to see what happens.
We are also following the situation at ServiceMaster which is facing a series of challenges with its TruGreen brand. ServiceMaster has been a major part of the lawn care merger & acquisition market for a number of years. With their activity very limited, there has not been much action in the lawncare industry segment this year – at least so far.
As always, if you are considering selling or buying a green industry business or you are ready to begin developing your exit plan, we welcome the opportunity to discuss your situation confidentially. Justst give us a call or send us an email.
Ron Edmonds
[email protected]
888-229-5740
901-351-1510 (cell)
Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net
|
|
Leonard Green Pursues Sale of The Brickman Group
Valuation May Reach $1.5 Billion
Leonard Green and Partners LP, a Los Angeles-based private equity firm, is pursuing a sale of The Brickman Group according to a report published by Reuters. The report indicated that two investment banking firms, Barclays and Morgan Stanley, have been engaged to conduct an auction for the business. The report has not been confirmed by Leonard Green, Brickman or either of the two investment banking firms, but seems to confirm widespread speculation that Brickman would soon be sold.
 Leonard Green acquired its majority stake in Brickman in January 2007 in a recapitalization which also took out a former private equity investor in Brickman, CIVC Partners of Chicago.
A new CEO was named last year replacing long-time CEO Scott Brickman (who remains chairman). Andrew Kerin, Brickman’s new CEO, was previously a senior executive of Aramark, a private equity-backed facilities services company. The addition of Kerin led to apparently unsupported speculation that Brickman might be acquired by Aramark. The appointment of the new CEO was seen at the time by many as a part of a strategy to prepare Brickman for an eventual sale, which seemed reasonable, especially given the length of time that Leonard Green has held its investment in Brickman.
Potential Buyers
There are, of course, a wide range of potential buyers for Brickman. They include another private equity firm in a “flip” transaction, another financial buyer and a large facilities services company. A facilities service company might be seeking to add landscape services to their portfolio of services or increase an existing landscape services business. While not impossible, it seems unlikely that another landscape services company would be likely to pursue such an acquisition.
Impact on the Landscaping Services
Merger & Acquisition Market
It is difficult to assess what impact a sale of Brickman might have on the overall landscape services merger and acquisition market. None of the three largest landscape services companies in the US market have completed any publicly announced acquisition transactions in the last two years. ValleyCrest is controlled by MSD Capital, in turn controlled by Michael Dell. Dell is currently involved in an attempted buyout of Dell Inc., the world’s number three computer company which he founded and serves as chairman. TruGreen Landcare was itself acquired by the private equity firm Aurora Resurgence in 2011. The Davey Tree Expert Company is the only one of the top landscape services companies to be active in the acquisition markets recently, having completed acquisitions in Illinois, Minnesota and North Carolina during 2012 and 2013.
It seems unlikely that the possible sale of Brickman will have much impact on the overall M&A market anytime soon. However, it is possible that a buyer might want to move to fill out Brickman’s network in the relatively few markets in which it may be perceived to be weak. It is also possible that opportunities might arise as a buyer acts to integrate Brickman’s operations into its own.
No matter what ultimately happens with Brickman, other players in the fiercely competitive landscape services industry will no doubt be seeking opportunities to exploit the situation with both customers and employees.
In addition, the attention given to a large transaction like this is likely to focus investor attention on the landscape services industry, especially if Brickman is able to command a high valuation. Other private equity firms may focus their attention on other opportunities in the industry which could be a catalyst for a higher level of merger & acquisition transactions in the future.
|
|
TruGreen Drags Down ServiceMaster During the Second Quarter
Lawncare Acquisition Activity is Minimal
ServiceMaster reported its earnings for the second quarter of 2013 on August 14, including results for its TruGreen Lawncare brand. TruGreen’s revenues decreased 12.4% during the quarter compared to the prior year.
The decrease in revenues for TruGreen was attributed by the Company to a 6.3% decline in residential full program customer counts, inefficiencies in service delivery caused , in part, by integration issues with newly implemented technology and a decrease in revenues from commercial customers. The Company briefly discussed its plans to address its operational challenges.
ServiceMaster also completed an impairment analysis which resulted in an impairment charge of $673.3 million to reduce the carrying value of goodwill on TruGreen’s books.
During the six months ended June 30, 2013, TruGreen had minimal acquisition activity compared to prior years. ServiceMaster’s 10-Q for the quarter did include the following statement: “The Company expects to continue its tuck-in acquisition program at levels consistent with prior periods.” Over the past two years, ServiceMaster’s acquisition activity has focused much more on the Terminix brand than TruGreen.
TruGreen’s president David Alexander joined the Company in December 2012. ServiceMaster’s CEO joined the Company in June 2013.
TruGreen’s acquisition activity has been an important part of the overall lawncare acquisition market in recent years. Its absence this year is an indication that merger & acquisition activity in this segment of the green industry is much lower than in past years.
|
|
Do You Understand the Value of Your Business?
 Understanding the Value of Your Business is an important step in the Exit Planning Process. Most business owners do not have a clear idea of the value of their business or understand the important factors that drive that value. Understanding the value of your business will help you plan for the future and will also allow you as a business owner to take constructive steps to improve that value over time.
The Principium Group offers a cost-effective approach we call the Market Value Assessment. The Market Value Assessment provides a valuation for your business based on established methods and industry conditions for planning purposes. It also will specifically identify important factors that affect the value of your particular business.
If you are interested in learning more, please click here, email us or call Ron Edmonds at 901-351-1510.
|
|
Green Exit University:
Improve Your Odds for a Greener Exit-
Develop Your Own Exit Plan
.
 If you have been thinking about exit planning, but don’t know where to start or have been worried about the cost of bringing in professionals to assist you in the process, Green Exit University may be just the answer for you.
Surveys show that nearly all Green Industry business owners have objectives for what they would like to do after they retire and/or sell their businesses. However, less than 40% have an exit strategy and that less than 15% have an exit plan. Experience tells us that those without a strategy and a plan are unlikely to achieve their objectives of being able to exit their business on their timetable and to enter the next phase of their lives financially stable. Improving those odds is what exit planning is all about and Green Exit University is a new, cost-effective approach to developing an exit plan for your business. Green Exit University includes twelve modules of training, each including two or more videos, reading, exercises based on your business and quizzes to measure your progress. At the conclusion of the course, you will have developed an exit plan for your business.
There are three levels of participation in Green Exit University.
All three versions are economical. Choose the one that meets your needs. For a comparison of the Green Exit University Options, visit greenexituniversity.com/cost-structure/
Here’s a link to a video “Sneak Preview” of Green Exit University content.
Click here for more information or contact us.
|
|
|
