Green Merger News – February 2013



The High Cost of Uncertainty


Now that over 45 days have passed, it is safe to assume that we have heard of most merger & acquisition transactions that were completed in 2012.  At least in the Green Industry, we can hardly call the fourth quarter activity strong.  This was, in some respects, highly surprising given the common expectation that the scheduled increases in both capital gains and ordinary income tax rates along with the  implementation of a 3.8% tax on unearned income would lead to a rush to complete transactions prior to year-end before the increases came into effect. How well we know that what really happened was that the political wars were in high gear during the last couple of months of 2012 as the “fiscal cliff” drama.  For the most part, small business owners, no matter their personal political persuasion were disappointed in the failure of the Congress and the administration to compromise and move forward.   Although we have had a brief respite, the airways are filling with the nearly unpronounceable word “sequestration” and it sounds like the “fiscal cliff” all over again.

Personally, I wonder if our country’s  leadership understands the cost of all of this brinkmanship and uncertainty on the business community.  If they really understood the toll this all takes, it is hard for me to believe they would not reach a positive compromise and move forward.

In general, the merger & acquisition market place is beginning to shows signs of life, with large transactions like Warren Buffett’s acquisition of Heinz and the mergers of American Airlines and US Airways and of Office Depot and Office Max in the news recently.  We are hopeful and see some signs that M&A activity in the green industry may increase as well.

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.  Just give us a call or send us an email.

Ron Edmonds

[email protected]

888-229-5740, ext. 801

901-231-4180 (direct)

901-351-1510 (cell)

Six Reasons to Consider Buying a Design-Build Landscape Company


Design-build companies are often the step-children  in the merger and acquisition marketplace.  The main reasons for this are pretty straight-forward.  In most cases, they have little, if any, of the “recurring revenue” which is so highly prized in acquisitions.  In addition, because they are construction-related, they are, at least conceptually, very susceptible to economic cycles and down-turns.  The Great Recession made this painfully apparent for most (but not all) design-build companies.

That being said there are some very good reasons to consider acquiring a design-build company.  Here are five:

One:  Valuations can be very attractive.  Because valuations are so low, there can be some extremely good deals and a buyer may have the opportunity to still be very selective.

Two:  Acquiring a design-build company can be a good way to expand into a new geographical market.  Even if your business is primarily maintenance-oriented, acquiring a design-build business can be a cost-effective way to move into a new market with an established presence from which to build.

Three:  Acquiring a design-build company can be an effective way for a primarily maintenance business to add a profitable business line which can feed the maintenance business and help avoid the risk of established customers seeking services from competitors.

Four:  Acquiring a design-build company can help a company sell to a new customer segment.  You may be able to acquire a company that has a strong presence in a particular industry segment you may find desirable, such as healthcare facilities, educational institutions or some governmental work.

Five:  Acquiring a design-build company can provide access to specialized skills, experience and reputation in highly-desirable specialty area such as LEEDS certification, green roofs, water-efficient landscaping, etc.

Six:  Some design-build companies have such a strong marketing and sales generation system serving attractive markets that they actually have many characteristics of recurring revenue.



Recent Transactions


The Bruce Company of Wisconsin, number 32 on Landscape Management’s 2012 LM150 listing of the largest landscape companies in the U.S.,  announced a strategic alliance with Reliable Property Services LLC of Eagan, Minnesota.  The alliance includes the sale of Bruce’s lawn maintenance, snow and ice management operations in Milwaukee and Racine, and its golf course maintenance division to Reliable. Reliable, the seventh largest snow and ice management company in the U.S., has operations throughout Iowa, Minnesota and Wisconsin.  Bruce will expand its wholesale nursery sales and landscape design and construction operation to Minnesota and Iowa, where Reliable has year round clients. Bruce will retain its landscape design and construction business in Wisconsin, including the Milwaukee operations, as well as its seasonal landscape maintenance and snow and ice removal services in the greater Madison area.  Bruce will also retain its retail garden center in Middleton, Wisconsin.

The Davey Tree Expert Company has acquired S&S Tree and Landscaping Specialists, the largest family-owned tree company in Minnesota.  The acquisition of S&S is Davey’s fifteenth in the past five years and is part of a larger growth and expansion strategy.  Based in St. Paul, Minn., S&S provides tree, landscape and lawn services and will continue to operate under its existing name as a division of Davey.

Birmingham-based McKinney Capital announced the acquisition of  Grounds Unlimited, also based in the Birmingham area.  Grounds Unlimited will be merged into McKinney’s Landscape Workshop, by the end of 2013.  Landscape Workshop is McKinney’s platform for developing a major regional landscape contractor throughout the Southeast.


Webinar:  Improving the Odds of Getting an Offer for Your Business


Please join us for a webinar on “Improving Your Odds of Getting an Offer for Your Business”.  The webinar will be held on Thursday, March 7 at 12:00 noon, Central Time, 1:00 pm Eastern Time, 11:00 am Mountain Time, 10:00 am Pacific Time.

This webinar will be led by Ron Edmonds of The Principium Group and will include insights gathered over the last ten years.  Please submit your questions too!

Click here to register.

Do You Know Your Sellability Score?


Have you wondered just how sellable your business is?  Here’s a chance to find out.  Take this quiz and find out your business’s sellability score.  You’ll receive your Sellability Score immediately, and then we will send you a 24-page report that provides additional feedback and  schedule a complimentary phone call to discuss the results.  As an added benefit, we’ll also send a  PDF e-book copy of Green Exit—to everyone who completes the Sellability Score quiz.

Click here to get your Sellability Score.

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 hereemail us or call Ron Edmonds at 901-351-1510.


Books by Ron Edmonds


Ron Edmonds of The Principium Group is the author of three books of special interest to green industry business owners:


Green Exit – Exit Planning for Lawn and Landscape Business Owners

Charting a Course – Acquisition Strategies in the Green Industry and

How to Sell Your Green Business

For more information about these titles or to order copies from the publisher, click on the links above.

You can also order them from in print or kindle formats. Click here to visit our Amazon Store.