Subject: Green Merger News -Industry Consolidation & Beer

Green Industry M&A News

September 2018
Edited by Ron Edmonds

Industry Consolidation and Beer
To our clients & friends:

We've passed the autumnal equinox.  The garden centers are full of pumpkins and mums.  The air is a bit cooler (at least some days).  Landscapers and lawn care business owners are slowing down a bit and some are thinking about their options, especially with the extended strong market we have seen.

This month, we are introducing an additional tool for self-evaluation in addition to the Value Builder Score.  We are beginning to use The ExitMap Assessment to help you identify the path to a successful exit.  

As always, if you are ready to discuss the sale or acquisition of a lawn or landscape business, we would welcome the opportunity to talk.  Give us a call or email or meet us in Louisville during Landscapes 2018 and GIE+EXPO.


Ron Edmonds

Meet Us at GIE+EXPO and Landscapes 2018
We will be in Louisville, Kentucky, October 16-19 attending Landscapes  2018 and GIE+EXPO.
These are always great networking events and we hope you will be there too.
If you'd like to meet up in Louisville, contact us or click here to schedule a meeting.
Industry Consolidation:
What Landscape Services Can Learn From  Beer
There has been a great deal of attention paid to the emergence of BrightView Landscapes as the largest U.S. landscape company, as a result of KKR&Co.’s acquisition of first The Brickman Group and then ValleyCrest, each of which had been through close to two decades of consolidation. Many industry people view consolidation with some disdain. There are many reasons for that, but most can be tracked back to vigorous competition in one way or another -competition for quality clients, labor and management talent, to name some obvious ones.

When people ask me about the impact of consolidation, I usually include in my response that there will always be room for new entrants in the industry. We are a long, long way away from consolidation really affecting the level of competitiveness in the industry.

To see what might happen some day, let’s look at what has happened in another industry – beer. The beer industry has gone through a dramatic consolidation over a number of years. The industry leader ABInBev now controls 28% of the global market. The top five companies control over 50% of the global market. The landscape services industry leader BrightView is said to control 2.7% of the U.S. market.

One of the amazing things about the beer market is that despite consolidation, there has been a fairly incredible period of innovation and entrepreneurship. Who would have ever thought there would be half a dozen microbreweries in my home town, in addition to several brew pubs?

Why has this phenomenon happened? I think there are several reasons. Consolidation often makes talent available. Consolidated companies may not require as many managers as they realize the synergies of consolidation. Many managers simply do not want to work for a “big company”. Savvy entrepreneurs also realize that there are many customers who want something different than the large company can efficiently provide.

The opportunity for innovation can really explode during a period of consolidation. Innovation can emerge from many things– the press of competition for customers, the stress of labor shortages, among others.

Larger, consolidated businesses have many advantages based on scale, but independent operators have many advantages too. They are, by necessity, close to their customers. They can also be nimbler, making decisions and exploring opportunities as they arise.

Independent operators should consider an era of consolidation as an era of opportunity too.

Recent Transactions
Here is a recap of recently reported merger & acquisition transactions  in the lawn and landscape industry.

CNL Strategic Capital, LLC has acquired a controlling interest in Lawn Doctor.  CNL Strategic Capital is managed by  an affiliate of CN Financial Group and sub-managed by an affiliate of  Levine Leichtman Capital Partners, which manages CNL Strategic Capital's investments.   More information.

Lawn Doctor has acquired Mosquito Hunters, a mosquito and pest control franchisor. More information.

Westhook Capital has invested in Metco Landscape in Denver, Colorado area. More information.

Landscape Development, Inc. has acquired Chateau Landscape in Santa Clarita, California. More information.

idverde has acquired Out There Landscape in Northern Ireland.   idverde is a portfolio company of Brussels-based Core Equity HoldingsMore information.

Heartland, LLC has acquired Columbia Landcare in Columbia, Missouri. Heartland is a portfolio company of Great Range CapitalMore information.

Coeur d’Alene, Idaho- based Tree Medic has acquired Specialty Tree Services, also of Coeur d’Alene.  More information.

In the Pittsburgh, Pennsylvania area, Edkins Tree Care has acquired Nassar Tree Care.  The combined company will be known as Nassar Tree Care.  More information.

Exit Planning Tools

Get Started with Exit Planning
We use the ExitMap® Assessment© to examine your company’s current exit preparedness in four key categories; Operations, Planning, Finance and Revenue/Profit. It has is a 22 multiple choice questions, questionnaire which will take you takes only 15 minutes to complete and requires no confidential information. A full- color 12-page summary report will be emailed to you upon completion.  Click here for more information and to get started.
Do you have a business that is valuable & sellable?
Find out by taking  a brief online questionnaire to receive an immediate Value Builder Score of between 1 and 100 for your business. You will also receive a 26 page report full of charts and graphs that will give you insights into how buyers evaluate your business.
Do you understand the value of your business?
Understanding the value of your business is a key step in exit planning.   We offer cost-effective valuation services which help you understand the value of your business and the factors that drive that value.
About The Principium Group

The Principium Group provides advisory services related to mergers & acquisitions and exit planning to lawn, landscape, and facilities services businesses. 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.

Principium Group
P.O. Box 414
Cordova, TN 38088

Ron Edmonds

Chris Martin
888-229-5740, ext 103

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.
Principium Group, PO BOX 414, 38088, Cordova, United States
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