Green Merger News – May 2011



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.


——Ron Edmonds

Aurora Capital Acquires TruGreen Landcare, Cites Growth Opportunities in the Industry


Aurora Capital Group, a Los Angeles-based private equity firm, has completed the acquisition of  TruGreen Landcare from The ServiceMaster Company.  On a stand-alone basis, TruGreen Landcare would rank as the seventh largest company in lawn and landscape industry and the fifth largest landscape services company.

TruGreen LandCare is a leading U.S. provider of landscape maintenance services to commercial, industrial and municipal customers.  It will continue to offer a comprehensive suite of landscaping services through a network of 60 branches in 17 states.  The sale of TruGreen LandCare’s business does not impact ServiceMaster’s TruGreen lawn care unit, which provides residential and commercial lawn, tree and shrub care to 2.5 million residential and commercial customers within the United States and Canada.

TruGreen LandCare dates to the late 1990s when ServiceMaster acquired a series of commercial landscaping and related businesses through its TruGreen subsidiary.  In March, 1999, ServiceMaster acquired Landcare USA, Inc. in a transaction which included the issuance of ServiceMaster shares valued in at $191 million and the assumption of debt totaling approximately $140 million.  After the acquisition of Landcare USA, ServiceMaster reported that it operated 140 landscaping branches in 28 states throughout the United States.

At the time of Landcare USA acquisition, ServiceMaster reported that the combined landscape services operations had annual revenues of approximately $550 million.  After a long period of disappointing performance and downsizing, ServiceMaster reported $238 million in revenues for its TruGreen Landcare segment in 2010.  ServiceMaster announced in the fourth quarter of 2010 that it was pursuing strategic options for TruGreen Landcare.

Aurora Capital Group is a Los Angeles-based private investment firm managing over $2.0 billion of capital across several private equity funds. Aurora’s traditional private equity vehicle, Aurora Equity Partners, focuses principally on control-investments in middle-market businesses with leading market positions, strong cash flow profiles, and actionable opportunities for growth in partnership with operating management. Aurora Resurgence invests in middle market companies, often in connection with a corporate divestiture.  According to its website, it targets complex situations that are created by operational or financial challenges either within a company or a broader industry and act as a constructive partner with management teams and other stakeholders to help drive financial growth and operational improvements.

Gerald L. Parsky, Chairman of Aurora Capital Group, said, “TruGreen LandCare is an excellent addition to our Aurora Resurgence program. This transaction is another example of Aurora Capital Group successfully acquiring a corporate divestiture in the middle-market. We are confident in TruGreen LandCare’s growth prospects, and we believe we can bring operating resources to the company to help create value for our investors.”

Anthony DiSimone, Managing Partner of Aurora Resurgence, said, “This is an opportune time to add TruGreen LandCare to the Aurora Resurgence portfolio. The long-term fundamentals of the landscape industry are attractive given the recurring nature of maintenance contracts and the pent-up demand for enhancement work that is expected to be completed in the coming years. We intend to position the company as a standalone business and capitalize on the significant growth opportunities in the industry. We look forward to working with TruGreen LandCare’s excellent management team to grow the business both organically and through strategic acquisitions.”

Mac McIlvried, President and Chief Operating Officer of TruGreen LandCare, said, “We are excited to join Aurora Capital Group and look forward to growing our business in partnership with our customers, suppliers and employees. We will continue to seek opportunities that strengthen TruGreen LandCare’s landscaping service offerings and pursue growth in existing and adjacent geographies.”

Hank Mullany, chief executive officer of ServiceMaster, said, “Like all companies, we continuously review our businesses to ensure we are maximizing value for our investors by providing outstanding service for our customers. Our decision to sell to Aurora Resurgence allows us to concentrate on our core residential and commercial businesses.”


Worth Reading

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

You can order a copy of Built to Sell from and other online book retailers.



Recent Transactions


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.


Exit Planning Assessment

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.

Contact us by email or call us at 888-229-5740 today to discuss scheduling an Exit Planning Assessment for your business.

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