The Times Great Companies Are Built In
I recently called a green industry businessman about a business opportunity – a business for sale in a complementary segment of the green industry. It wasn’t an obviously perfect fit, but I thought there was a chance he might be interested enough to take a look. After hearing that I was calling about a potential acquisition, he almost dismissed it without even hearing about the opportunity. As we talked, his tone changed a bit, and we agreed to meet after the holidays to discuss this and other opportunities down the road.
A Look Back at 2009 Merger & Acquisition Activity
2009 was definitely a down year for mergers & acquisitions within the green industry – and for just about every other industry as well. The twin specters of economic uncertainty and an often extremely challenging credit market caused the number of transactions to fall both out of necessity and out of caution.
That being said, many transactions did get completed. In this article, we will recap many of the transactions that did take place as we try to make sense of what to expect in the coming year.
Yellowstone Landscape Group and its private equity sponsor, Gridiron Capital, announced their third platform acquisition, Austin Outdoor, based in Bunnell, Florida, with a number of other offices in Florida, plus the Bahamas.
The assets of Hines Horticultural were acquired by Black Diamond Capital Management, LLC. Hines had filed for bankruptcy protection in August 2008. The business is now known as Hines Nurseries, LLC. Hines is one of the largest commercial nursery operators in North America, operating seven nurseries in four states.
Bartlett Tree Experts announced the acquisition of Empire Tree and Turf in Augusta, Georgia, and Top Notch Treecare in Plymouth, Minnesota.
Mission Landscape of Tustin, California, acquired Landarcwest, a landscape architecture firm based in Irvine, California.
San Jose-based Jensen Corporate Holdings, Inc. acquired Huppe Landscape Company, Inc. of Roseville, California.
Arizona-based Pathway Landscape, a landscape architecture firm, announced what it called a strategic partnership with Paradise Full Service Landscaping of Scottsdale, a full-service landscape maintenance business. The combined company, operating under the name Pathway Landscape Maintenance & Design, serves Scottsdale, Tempe, Phoenix and nearly every other city in the Valley of the Sun.
Denver-based American Civil Constructors sold its landscape maintenance unit, ACC Landscape Services, LLC to Progress Equity Partners. ACC Landscape Services operations are in Colorado and Northern California.
Noblesville, Indiana-based Custom Touch Irrigation acquired Indianapolis-based Perfect Property Services.
The Brickman Group announced it had “formed a partnership” with Pontiac, Michigan-based Torre & Brugglio.
Brighton Partners, LLC acquired a 70% interest in New England lawn care company, Lawn Dawg, Inc., in a recapitalization. Lawn Dawg has operations in Nashua, New Hampshire, Boston, Massachusetts, Albany, New York, and Portland, Maine. Lawn Dawg’s president, Jim Campanella, continues in that role and as a major shareholder. In announcing the recapitalization, Campanella, an industry veteran and former president of the Professional Lawn Care Association of America, also announced plans to launch an acquisition program.
Austin Outdoor, LLC, a unit of Gridiron Capital-backed Yellowstone Landscape Group, acquired Dolphin Landscape of West Palm Beach, with operations serving Martin, Palm Beach and St. Lucie Counties in Florida.
Sav-A-Tree announced the acquisition of H.R. Spooner Ornamental Care of East Falmouth, Massachusetts on Cape Cod.
The Brickman Group announced the acquisition of D. Foley Landscape, Inc. of Walpole, Massachusetts.
Also in October, two Atlanta-area lawn care businesses, Crabapple Turf Management, Inc. and Unlimited Landscaping and Turf Management, Inc., merged their residential lawn care businesses.
Massey Services, Inc. completed the acquisition of Sunair Services, Inc. and its Middleton Pest Control subsidiary. The merger, the final chapter in a well-publicized take-over battle, combined cross-town, Orlando-area rivals and formed a very strong statewide network in the key state of Florida.
In May, Lawn and Landscape quoted newly-named TruGreen Lawncare president Steven Donly as saying, “Strategic acquisitions have always been a fundamental component of TruGreen’s growth strategy. We believe we can bring owners a compelling business case for growth and create a winning combination for customers looking for outstanding service from a brand they can trust.” TruGreen does not normally announce individual acquisitions, but in August it announced the acquisition of Nutri-Turf in Michigan and Easy Chair Lawn Care in Ohio.
An analsyis of the public filings of The ServiceMaster Company, TruGreen’s parent company, suggest that TruGreen completed acquisitions totaling approximnately $15 million during the first nine months of 2009, compared to approximately $20 million during the first nine months of 2008. Two major acquirors in years past, Scott’s Lawn Service, a unit of The Scott’s Miracle-Gro Company and The ValleyCrest Companies reported no acquisition activity during the year.
What to Expect in the Coming Year
Now that we seem to have passed through the worst of the recession of the laswt two years, we believe there are some key trends to look for over the next year.
Weaker industry players will seek exit opportunities
Sellers who deferred action in 2009 will make moves in 2010
New consolidation efforts will emerge
Government policies will encourage transactions
Scheduled capital gains tax rate increases will motivate many sellers
How to Sell Your Green Business is a practical guide for owners of green industry businesses such as lawn care companies, landscape contractors, nurseries, garden centers and similar businesses considering the sale of their business either now or sometime in the future as part of an exit strategy.
How to Sell Your Green Business was written by Ron Edmonds, president of The Principium Group. He walks readers through the process and gives tips for improving the value and marketability of their businesses while avoiding common pitfalls. The book is targeted at business owners who will be selling their businesses themselves as well as those who will be using an intermediary or business broker.
How to Sell Your Green Business is available from Principium, the publisher and various channels. For more information, visit books.PrincipiumGroup.com.
The Toolkit is intended to supplement How to Sell Your Green Business: A Guide for Green Industry Business Owners with a series of worksheets to guide business owners through the potentially confusing process of preparing to sell their business.
This process can be valuable for both owners considering selling their business themselves and those who plan to use an intermediary or business broker.
For those who plan to sell their business themselves, it provides a structure for the process and tools for such processes as calculating cash flow and preparing and placing an online advertisement for the business. For those who will be using a business broker or other intermediary, the process will help them prepare, be actively engaged in the process and understand the steps in the process. The Toolkit comes in a three-ring binder with access to a special website which has extra copies of the worksheets and other extras which can be downloaded. For more information, visit books.principiumgroup.com.
The Principium Group provides mergers & acquisitions and business brokerage services to a variety of middle market and small businesses, with a focus on the green industry. Our professionals have assisted buyers and sellers 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.
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, we would welcome the opportunity to talk with you about your business.