The acquisition of TruGreen Landcare by Aurora Capital should have several positive implications for merger & acquisition activity within the landscape services industry. Most importantly, it represents another indication that the private equity market is attracted by the stability of maintenance revenues and growth opportunities as the economy emerges from the recession. It also removes the uncertainty associated with one of the industry’s major players being on the market. The new owners have also indicated that they intend to pursue strategic acquisitions in addition to organic growth, so, potentially, there is a new buyer in the marketplace.
As the year progresses, we expect merger & acquisition activity to continue to build within the industry.
If you are considering pursuing a transaction, as either a buyer or seller, we would welcome the opportunity to discuss opportunities with you.
Built to Sell:
Creating a Business That Can Thrive Without You
It is a mystery to many business owners what makes a business “saleable” and at a high value.
Author and columnist John Warrilow unravels that mystery for business owners in his new book, Built to Sell: Creating a Business That Can Thrive Without You (New York: Portfolio/Pengin).
Warrilow uses the story of Alex Stapleton, the owner of an advertising agency who consults a wise friend about selling his business. With his friends advice, Alex transforms his relatively small, rather run-of-the-mill, advertising agency into a scalable business that was attractive to potential buyers. At 153 pages, the story is easy to read and offers plenty of personal insights. It also includes an implementation guide for the concepts he introduces in the narrative.
You may have some trouble with some of the ideas that he recommends for service business owners, such as adopting the language of products versus services. For example, he suggests referring to “customers” as opposed to “clients.” He even suggests that many service businesses would be well-advised to employ sales people with experience in product sales as opposed to selling services. He theorizes that such sales people will be better able to explain to potential customers how your business’s product meets the customer’s needs as opposed to how you can customize your service to meet the customer’s needs. He views that as an important issue in reaching the goal of scalability.
All-in-all though, Warrilow is right on with his recommendations, including that you set the goal that every product or service should meet three criteria. It should teachable, valuable and repeatable.
We sometimes have to tell business owners, just like Alex is told, that their business is practically worthless. The good news we try to share is that there is something you can do about it.
The other good news from this story is that the same steps that make your business more sellable and valuable to a buyer, will likely make it a stronger, growing and more profitable business for you as the owner, even if you don’t plan to sell it for many years.
John Warrilow is a columnist for Inc. Magazine and The Globe and Mail. His blog can be found at www.builtosell.com.
You can order a copy of Built to Sell from Amazon.com and other online book retailers.
The Davey Tree Expert Company has acquired Tree Health Professionals Inc. of Campbell, California, and will integrate its expert services into its residential/commercial operations. Tree Health Professionals provides tree and shrub care services to residents throughout the South Bay and Mid-Peninsula areas. It will merge its operations with Davey’s Santa Clara territory, which serves clients throughout the Santa Clara Valley and surrounding communities. This transaction is Davey’s sixteenth in the past five years. It follows Davey’s June 2010 acquisition of Hartney Greymont.
New York-based SavATree, a provider of tree, shrub and lawn care services, has acquired Town & Country Tree Experts of Midland Park, New Jersey. SavATree has been an active acquirer of other tree and lawn care businesses in the Northeast and Midwest in recent years.
A Cost-Effective Way to Get Started on the Exit Planning Process
An Exit Planning Assessment from The Principium Group is a confidential, cost-effective first step in the exit planning process. Here’s what it includes:
· We will develop an understanding of your business, your personal situation and objectives.
· We will make an assessment of the value and marketability of your business. (This will not be a formal business valuation for third-party use, but will give you an idea of the value your business could bring under current circumstances.)
· We will provide concrete recommendations for improving the value and marketability of your business as you make plans for your ultimate exit.
We will provide feedback on your objectives and how to develop a plan to achieve those objectives.
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