Into the fire

Reliable No. 43 | Bruce No. 74

In a nutshell | Seth Nicholson breaks down the Reliable/Bruce Co. transaction:

“The Bruce Co. sold its snow and lawn services businesses in Milwaukee and Racine, as well as its golf maintenance operations in the Midwest to Reliable. Reliable acquired the accounts, staff, equipment and territory for Milwaukee and Racine snow and lawn services. Reliable also acquired the accounts, staff and equipment for all golf maintenance accounts served by The Bruce Co. Bruce got the opportunity to expand its core landscape construction business in southeastern Wisconsin and alongside Reliable in Minneapolis and Des Moines, as well as to supply nursery stock to Reliable customers from Bruce nursery growing operations in Wisconsin.”

When Reliable Property Services, a snow and ice management company headquartered in Eagan, Minn., signed a contract to join forces with The Bruce Co. (headquartered in Middleton, Wis.) on Feb 1, 2013, it started snowing that very evening. In fact, it snowed on 28 of the next 30 days, putting the new business arrangement fully to test. And while the abrupt timing didn’t give the companies much chance to prepare for change, it did provide the opportunity to get right to work.

“It was important that our customers knew that if it snowed, they’d be taken care of,” says Tom Hougnon, chief operating officer at Reliable. “We had the chance to prove ourselves right away and we knew that how we handled those first few weeks would be critical to the overall success. Fortunately, being thrown into the fire ended up working to our advantage.”

Reliable acquired The Bruce Co.’s maintenance and snow and ice management operations in Milwaukee and Racine, as well as its golf course maintenance division. By spinning off these services, it has allowed The Bruce Co. to move resources and people into their areas of expertise with Reliable, while also expanding the Bruce Co.’s wholesale nursery, landscape design/build construction work and its maintenance businesses into the greater Madison market area. It also gave the Bruce Co., an opportunity to expand its design/build construction business into Minnesota and Iowa in conjunction with Reliable’s presence in those markets.

“We were looking for a way to focus on more efficient management and coordination across our operations and a better utilization of personnel, equipment,” says Seth Nicholson, chief operating officer of The Bruce Co.

As one of the largest snow and ice removal companies in the country – it ranked eighth on Snow Magazine’s own 2013 Top 100 List – Nicholson says Reliable was a good fit for these objectives, and certainly had the capacity to handle the Bruce’s contracts in Milwaukee and Racine. And Nicholson says complementing values between the two companies also helped seal the deal. “We have similar philosophies about taking care of the customer,” Nicholson says. “Continued communication has given us every chance to find ways to work together in providing a higher level of customer service at lower costs.”

Communication has certainly been a key to the success of this partnership. That has included both communication between the companies as well as with employees and customers. “We had to communicate at every step of the way,” Hougnon says. “With any change, it’s really important to be upfront with customers and employees – from anything that might change with insurance benefits to anything that might change on the customer side.”

Even the smallest details can contribute to the success or failure of an endeavor like this. After the deal, invoices look different. Even though the total billed amount may not have changed, a new look could be all it takes to alert customers that something is “up.”

“Making sure that the sales team went through the changes to the invoice with customers was really important for us,” Hougnon says. “Similarly, it was important that human resources went through any changes with benefits or other internal issues.”

Nicholson also says communication to colleagues and competition was key. “Initially, as we went through this process, others in the industry were asking if we were leaving the business,” he says.

“If we didn’t tell our own story, they’d make up their own. When a transaction like this happens you cannot communicate enough to the rest of the world. We made sure our customers and employees had a good understanding of what it will mean to them – not just what the changes mean to the company. They want to know how it will affect them, too.”
 

Client retention.

Reliable and Bruce were able to avoid lost accounts largely because of good communication and the opportunity to immediately deliver on promises. “It was an important lesson for us,” Hougnon says. “We wouldn’t typically try to plan a deal in the middle of a season but we found that there were actually several benefits to being thrown right into the fire.” For one, Hougnon says that doing a deal in the middle of a contract doesn’t give customers a lot of opportunity to think about changing providers. He says that with an immediate snowfall, Reliable was able to prove itself right away. “We’ve come to think about this as an interesting way to look at growing the company,” he says.

Nicholson says the deal took about eight months to complete from the initial conversation to the final agreement being signed. "Towards the end and after the transaction it felt rushed and hectic because we and Reliable wanted to be sure we had everything finalized and prepared for the upcoming spring season," he says.

David Frank, owner of David J. Frank Landscape Contracting, ranked 70 on this year’s Top 100 list and another big player in the north Midwest market, says that having been through a similar acquisition, he knows it can pose challenges. Frank acquired Lieds Nursery Co. at the start of the 2012 season. “It was mid-May and we felt like it was all a big rush,” Frank says.

“There is a lot going on at the beginning of the season and it can be stressful to jump into something new. It puts on a lot of pressure to perform. But the fact that they managed to keep so much of their business shows they did things right,” Frank says.
 

Positive outlook.

A year out from the deal, both parties report things are going well. “We have been able to focus our efforts on taking care of the customer,” Nicholson says. “There are always challenges in a transaction like this but we are happy with the level of the service our former Milwaukee/Racine clients are receiving.”

Business has been good at the company’s retail garden center, Nicholson says. “We have made significant renovations over the last two years,” he says, adding that since the transition, the company has had more than 10 percent growth in retained businesses.”

Hougnon says the companies have also learned a lot from each other. “As a company, we’ve learned from the way Bruce manages their landscapes maintenance work and upsells,” Hougnon says.

“With their focus being more on design/build they have a different way of doing those things and we’ve learned from that. For instance, making sure you’re planning five or six days out – knowing the plant materials are on hand and ready to go.”

And for former Bruce employees, Hougnon says Reliable’s use of incentives has been a positive change. “One thing we do is incentivize employees for hitting certain goals and we pay bonuses to the production team,” he says.

“That wasn’t something that was necessarily in place with Bruce before and has been one of the nice features that Reliable has been able to bring into the mix."

While both Nicholson and Hougnon see opportunities to learn from each other, they both took away a lot from the deal. “In hindsight you might think that having more time would have helped the planning process but the truth is that being forced into things right out of the shoot made us certain to dot every ‘I’ and cross every ‘T.’ The customer could see that nothing had really changed,” Hougnon says. “In the end, everyone is happy.”