December 2018






To our clients & friends:

At this time of year, we pause and give thanks for our clients and friends -throughout the U.S. and around the world  You are our reason for existence.  We count it a  honor to work with you on a portion of your journey as a business owner journey as a business owner.  We thank you for your confidence and pledge to work hard to continue to earn it.
2018 was an outstanding year in green industry mergers and acquisitions.  Although the recent stock market decline reminds us that the M&A market is also cyclical and subject to unforeseen twists and turns, we remain optimistic about 2019.  We are working on our annual “year-in-review” edition to be published in January.  If you know of transactions in 2018 that should be included in that list, please let us know.
As always, if you are ready to discuss the sale or acquisition of a lawn or landscape business, we would welcome the opportunity to talk.  Give us a call or email.

Meet Us at the NALP Leader’s Forum

We are planning to attend the NALP Leaders Forum from January 24-26 in Aruba.  If you will be there, we’d be happy to meet.  Just give us a call or drop us an email.

Building Value in Your Business

Move Your Multiple: Improve Cash Flow and Decrease Working Capital Requirements

Working Capital and Business ValueMost business owners understand that a company’s revenue and profits play a big role in its value. After all, a multiple of EBITDA (earnings before interest, taxes, depreciation and amortization) is one way to estimate the value a business. However, valuation is not nearly as simple as that.

One way to improve your multiple and increase the value of your business is to improve cash flow and decrease working capital requirements. These steps will also make your business stronger regardless of when or if you plan to sell it.
Cash flow is different than profits in that it measures the cash coming in and out of your business rather than an accounting interpretation of your profit and loss. For example, if you charge $10,000 upfront for a service that takes you three months to deliver, you recognize $3,333 of revenue per month on your profit and loss statement for each of the three months it takes you to deliver the work.

But since you charged upfront, you get all $10,000 of cash on the day your customer decides to buy. This positive cash flow cycle improves your company’s valuation because when it comes time to sell your business, the buyer will have to write two checks: one to you, the owner, and a second to your company to fund its working capital – the cash your company needs to fund its immediate obligations like payroll, rent, etc.

The trick is that both checks are drawn from the same bank account. Therefore, the less the acquirer has to inject into your business to fund its working capital, the more money it has to pay you for your company.

The inverse is also true.

If your company consumes cash, an acquirer is going to calculate that it needs to inject working capital into your business on closing day, which will deplete its resources and lessen the check it writes to you.

To improve the value of your business, you have to focus on both earnings and cash flow to have the maximum impact.

Recent Transactions

Here is a recap of recently reported merger & acquisition transactions  in the lawn and landscape industry:

California-based Landscape Development, Inc. has acquired New-Tex Landscape in Las Vegas, Nevada.
BrightView Landscapes has acquired Russo Lawn & Landscape of Hartford, CT.
Arrow Environmental, a unit of Environmental Pest Service, has acquired Miller’s Enviro-Care of Orlando.
English Gardens has acquired Plymouth Nursery in the Metro Detroit area.
LawnMan in Memphis has acquired Judi’s Professional Lawncare in the Huntsville, Alabama, area.
Authority Brands has acquired Mosquito Squad, a franchisor of mosquito control operators.
ServiceMaster will acquire New York City-based Assured Environments, a pest control company focused in the urban market.
OASE Living Water has acquired Atlantic Water Gardens.
SiteOne Landscape Supply has acquired All Around Landscape Supply and Santa Ynez Stone & Topsoil in Santa barbara, California.
Horizon Distributors, Inc. has acquired Turf and Garden, Inc. in Virginia and North Carolina.
International Deals
IDVERDE, based in France with major operations un the United Kingdom, will make another move by acquiring BTL in The Netherlands.  IDVERDE is a portfolio company of Brussels-based Core Equity Holdings.
In the U.K., Nurture Landscapes has acquired Grace Landscapes.
In Singapore, Advancer Global has acquired Country Cousins, a landscaping firm.

The Principium Group

The Principium Group provides advisory services related to mergers & acquisitions and exit planning to lawn, landscape, and facilities services businesses. 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 Principium Group

P.O. Box 414
Cordova, TN 38088

Ron Edmonds
[email protected]

Chris Martin
888-229-5740, ext 103
[email protected]


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.