|
From the Editor:
What Do These Large Acquisitions Mean for the Industry?
|
|
Two very large acquisitions affecting the green industry were annunced recently – the acquisition of The Brickman Group, Ltd. by KKR LP, a leading privarte equity firm, and the acquisition of John Deere Landscapes by Clayron, Dubilier & Rice, another top-tier private equity firm.
What do these acquisitions mean for the industry?
Most of all, they are a vote of confidence in the industry and the economy. You can rest assured that the private equity firms involved in these tranactions are planning for signficant growth.
Some have asked if the Brickman transaction will usher in a new round of aggressive price competition in the market. I doubt it. The margins which can justify a value like $1.6 billion are not sustained with aggressive discounting.
I also believe that acquisitions will again be a part of Brickman’s growth strategy going forwardas KKR seeks to add value to its investment.
News of these two transactions comes after a very positive Green Industry Conference and GIE+Expo last month in Louisville, Kentucky. Attendance at both events was up signficantly. We enjoyed the opportunity to meet many green industry business owners there. There was an atmosphere of much stronger optimism for the industry than in recent years.l
 As always, if you are interested in buying or selling a green industry business, ready to begin exit planning or considering an acquisition strategy, we would welcome the opportunity to talk.
|
KKR to Acquire Brickman for $1.6 Billion
On Monday, November 11, giant private equity firm KKR LP announced that it will acquire The Brickman Group Ltd. in a transaction valued at $1.6 billion.The announcement came after news leaked in recent days that KKR and a handful of other large private equity firms had emerged as leading bidders for Brickman in an auction initiated by Brickman’s existing majority owner, Leonard Green and Partners, another private equity firm.
 Andrew Kerin, Chief Executive Officer of Brickman, said “We are very pleased to partner with KKR, a leading investment firm with extensive experience in service businesses and an outstanding track record. With our partner, we are well positioned to accelerate our growth, further enhance the quality of services we provide to our clients and extend our industry leadership.”
 Simon Brown, Member of KKR, said “Brickman is a leader in its industry, with an outstanding management team, a distinguished culture, talented and committed employees, and a track record of delivering high-quality services to its clients. We are excited to invest in the company and look forward to working closely with the Brickman leadership team to continue to build on the Company’s market-leading position and grow the business over time.The acquisition is expected to close by December 31. For the full release, click here.
|
|
Private Equity Firm Clayton, Dubilier & Rice to Acquire John Deere Landscapes
|
|
Clayton, Dubilier & Rice, a large private equity firm, has agreed to acquire John Deere Landscapes, a unit of Deere & Company. Deere will initially retain a 40% ownership stake in the new standalone company. The carve-out transaction is valued at approximately $465 million. John Deere Landscapes has more than $1 billion in annual revenue and operates about 400 branches in the US.
 With over $1 billion in annual revenue, JDL is the largest North American distributor of landscaping products sold primarily to professional landscape contractors for use in residential and commercial settings. Operating over 400 branches in the United States and Canada, JDL is the only national distributor in a highly fragmented industry. JDL distributes wholesale irrigation, landscape lighting, nursery, and turf and maintenance supplies. Some turf and maintenance products are sold under the JDL-owned LESCO brand. “John Deere Landscapes is a market-leading, branch-based distribution business managed by a talented executive team that we are very excited to have as partners,” said David Wasserman, a CD&R Partner. “The business has many attractive features, including scale, breadth of product offering and service excellence, all of which provide significant strategic and competitive advantages in supporting the requirements of the professional landscape contractor.”“CD&R’s focus on growth and deep experience with businesses like ours make them an ideal partner,” said David Werning, President of John Deere Landscapes. “Deere’s ongoing equity ownership reflects its interest in remaining part of a successful landscapes distribution business.”
“The new company should benefit from a recovery in residential and commercial construction activity as well as through the meaningful value creation opportunities available to drive the business forward,” said CD&R Partner Ken Giuriceo. “We look forward to working with the JDL management team and Deere to build an even stronger value-added distributor.”
Among CD&R’s other major investments is The Servicemaster Company, parent of the TruGreen Lawncare and Terminix brands.
|
|
Click here for a list of markets with opportunities for business sellers. The primary focus is commercial maintenance, but some design-build may be acceptable. There are also opportunities for lawn care businesses in many markets,
|
Our Travel Schedule – We’d Like to Meet With You
We are currently planning to attend the following events:
Landscape Management Lawn Care Forum, November 13-14, Orlando
Planet/NPMA Lawncare Summit, January 27-29, Nashville
Green Industry Great Escape, Feb. 27-March 1, Anaheim
If you are attending any of these events and would like to meet, please contact us and we will schedule a time.
|
|
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 here, email us or call Ron Edmonds at 901-351-1510.
|
|
What’s Your Sellability Score?
|
|
The Sellability Score is a quantitative tool designed to analyze how sellable your business is.
After completing an online questionnaire, you will immediately receive a Sellability Score based on a 100 point scale along with instructions for interpreting your results. We will send you the full report along with a guide for interpreting the Sellability Score in the Green Industry.
|
|
|
|
The Principium Group provides advisory services related to mergers & acquisitions, exit planning and capital strategies to a variety of middle market and small businesses, with a focus on the green industry. 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 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.
|
|
|
