L&L Insider

The art of acquisitions

Jim Huston’s summer brainstorming session focused on the ups and downs of buying companies and an inside look at one of L&L’s Top 100 companies.

By Brian Horn

With the economy continuing to improve, the amount of companies being bought and sold will surely heat up. Two companies who have incorporated mergers as a growth strategy were part of Jim Huston’s brainstorming session, “Going M.A.D.” (mergers, acquisitions and divestitures) in Raleigh, N.C., in August.

Brian DuMont, owner of Yard-Nique, based in Raleigh, and Brian Lemmermann, owner of Somerset Landscape, based in Phoenix, talked about how they’ve approached mergers in recent years.

Yard-Nique has seven locations across the Southeast U.S. and revenues approaching $25 million. Three of those seven locations were acquired, with two taking place in the past 16 months. Somerset has grown from almost $7 million in 2011 to $35 million this year. Lemmermann, who you can read more about on page 226, has acquired 10 companies since 2011 and currently has offices in California, New Mexico, Texas, Utah and Nevada, and Arizona.
 

Know what you want. DuMont is usually looking at two to three companies at a time. He is open-minded about deals, but always has a strong idea about what he is looking for in a company. Whether it’s a strong culture, the equipment or the book of business, you should have clear priorities, he said.
 

Spread the word. DuMont and Lemmermann will both send word out to people they meet in the industry, stating they are in acquisition mode. DuMont will also task branch managers with bringing back three potential companies that fill Yard-Nique’s requirements.
 

Help and hurt. When it comes to brokers, DuMont said:

• A good broker is worth every penny.
• Bad brokers can break a deal.
• When not using a broker, things can get emotional and expectations and demands can become unrealistic.
   

No wholesale changes. When DuMont is in discussion with an owner about buying a company, he is clear he doesn’t want to buy it and then completely erase what the owner has done. He said when he lays out this plan, the owner is more inclined to sell, and at a better price, because DuMont values the history of the company.
 

After the sale. DuMont said he has handled post-acquisition incorporation both ways.

He has changed the name and leadership of an acquired company and rebranded it as Yard-Nique, and he’s left a company’s brand alone. It all depends on how strong the brand is and how much he likes the leaders.

Both Lemmermann and DuMont say they have learned a lot of new systems and practices from companies they’ve acquired. They say you have to be humble and can’t come in right away and start implementing your systems when the company you’re acquiring may have better ones in place.
 

The first visit. When first visiting the site of a company he has acquired, Lemmermann doesn’t want to “come in and make a splash.”

The first thing he does is get the buy-in from the lower and middle levels of the organization.

The worst case scenario for Lemmermann is a manager who wants to start his own company and take the crews with him. If he can get immediate buy-in from the crews, he has a better chance of avoiding that situation.

The first weekend after he acquired a company in Las Vegas, he spent time with the employees below the supervisor/managerial level in the office and in the field. “We come in really softly,” Lemmermann said. “We start with easy suggestions that can help operations, but we are taking just as many positive systems back to the parent company.”

DuMont approaches the first post-acquisition meeting by telling employees he admires what they’ve built and he has no plans to make wholesale changes. Yard-Nique also likes to start a newly-acquired company with a win like purchasing new mowers or repainting some trucks.
 

Organic growth. While acquiring companies is a great way to grow, it shouldn’t be the only way you increase your revenue, Lemmermann said.

“If you aren't able to grow organically, any acquisition can quickly become a liability and put your entire organization in jeopardy,” he said. “Acquisitions can be dangerous and are only a piece of a strong growth plan.”

Design, build and sell

L&L attended NALP’s Design Build Installation Symposium in Boston to learn about best practices in a growing segment of the green industry.

By Kate Spirgen

Design/build business is booming again as the economy and the housing market recover, so we headed to Boston for the National Association of Professional Landscapers’ symposium covering everything from hiring and retention to green walls and roofs. As part of the symposium, attendees toured different living wall locations.
 

Inbound marketing. Tyler Richer, principal implementation specialist at Hub Spot, a inbound marketing and sales software company, gave tips on inbound marketing, creating buyer personas and creating the right content to keep them interested.

• The customer now has control of the buying process and researches extensively before making a purchase.
• To attract leads and engage with prospects, create authentic content and personalized interactions throughout the buying process.
• More useful content means better search engine optimization.

In order to know your perfect customer, you have to know who you are trying to sell to and what their wants, needs and personality are.

You can do this by identifying certain factors and creating a buyer persona. Here are some of the common factors:

• Common behavior patterns
• Pain points
• Goals, wishes and dreams
• General biographic and demographic information “If you don’t know your buyer personas, every aspect of your inbound marketing will suffer,” Richer said.

The buyer’s journey is the active research process a potential buyer goes through. Once you can identify where they are in the buyer’s process, you can send them the right content from your website. The stages are and appropriate content are:

Awareness: I have a problem or need.

Content: Research reports, expert content, case studies, educational content

Consideration: I have a solution.

Content: Live interactions, expert guides, comparison white papers

Decision: I need to buy the solution.

Content: Vender comparisons, costs

Once you know your buyer personas, you can create and optimize content around each keyword or phrase they would be searching. Be sure to target locally so that you’re attracting the right people. For help, get a Google local listing and get a report from GetListed.org to show you where you’re starting.
 

Hiring and retention. Alex Pratt, area director of hiring and retention for Omni Hotels and Resorts, gave tips on hiring, training and retaining the right people.

• In order to find the right people, you need to know your market.
• To retain the right people, you need to do repetitious reinforcement. For example, if someone is doing well, tell them every week.
• To build your bench, identify your key players and ask them to help you recruit.
• Hold everyone to the same standard.
• Give those employees who want to move up the opportunity to do it.

“Being known as a company that promotes from within is a major factor in impacting retention,” he said.
 

Growth and profits. Ken Thomas of Envisor Consulting gave strategies to help contractors grow their businesses to a stable and profitable place. He started out as a small operation and while he knew a lot about landscaping, the business side was a tough lesson. “You can be a great cook, but you might not be able to run a restaurant,” he said.

Thomas said the life cycle of a business is like an S curve starting with startup, moving into growth, then adolescence, maturity and succession and decline.

“It takes the intentional actions of leaders and management doing the right things at the right time to make it to maturity,” he said. He noted that process is key to moving from the adolescent to the ideal phase: maturity. But working harder is not the answer.

Here are his tips for moving into maturity:

• In the absence of a process problem, if something goes wrong, it’s a people problem.
• Divide the duties of sales or you will be stuck working in your business instead of on it.
• Your system is only as good as it performs during a rush.
   

Green roofs. George Irwin, founder of Green Living Technologies International, went over some of the best practices for creating green roofs and walls, part of a growing niche. “Don’t ever associate green roofs with low maintenance. There’s no such thing,” he said.

• One of the biggest challenges is in the waterproofing. Media will spill out and roots will grow out of the box if it isn’t done properly.
• If you don’t fertilize, the first year will be fine, the next six months will see decline and then it will require a renovation.
• Use 20 percent organics in the soil and topdressing with compost every spring.
• Slow release fertilizer is a bad idea since it will just run off of the roof rather than sinking into the soil.
• Make sure to take water weight into consideration.
• Irwin recommends sod over seed to cut down on maintenance.

ND Landscape keeps things running smoothly

As part our trip to the Design/Build Symposium, we also stopped by ND Landscape in Georgetown, Mass., to find out how the company does business.

ND Landscape has been in business for 33 years in Georgetown, Mass., providing design/build, maintenance, enhancement and snow removal services for both residential and commercial customers. The company does $8.4-8.5 million annually and has spent the last two years focusing on its commercial maintenance division, which brings in $1.3-1.4 million, and the enhancement side, which does about $1 million. “That’s absolutely our weakest link right now,” said co-owner Nick DiBenedetto.

It took ND Landscape 18 to 20 years to break the $1 million mark, which they did by taking a hard look at who was owning each area like sales and management. They put systems in place to keep things moving smoothly, which helped them stay on track, DiBenedetto said, but it was “really tough.”

The company uses BOSS Landscape Management software to track jobs, materials and man-hours. The software will spit out a job ticket telling crews what materials they need, where they’re going and how much time they have to complete the project.

That way, if a project uses too much material or takes too much time, managers can see the pain points and ask the right questions.

The system didn’t work well for them for two years but then they brought in a consultant who taught an employee how to best use it. “You really need a power user,” DiBenedetto said.

The software tracks hours live and ND Landscapes uses tablets to help crews stay on track. Getting some of the older crew members on board with the new system has been tough, DiBenedetto said, and the company has lost a few foremen because they didn’t want to deal with the new regiment.
 

Noons on the move after trugreen acquisition

After selling their $8 million Noon Turf Care business to TruGreen last month, Christopher and Matthew Noon won’t be sitting idle for very long. The duo is already working on a new franchise, Smart Lawn, which they plan to launch in January of 2016.

“We found there’s a niche to offer better service for clients across the country,” said Christopher, who also operates Green Light Consulting.

Noon said he’s been in talks with TruGreen and its former parent company ServiceMaster since he entered the lawn care business in 2007. The pair had been thinking about franchising for a couple of years. When they received a “generous” offer from TruGreen, the two took it and can now concentrate on the franchise.

“It comes down to the opportunity,” he said. “We were in one region and a small territory, and I think our talents will be served better nationally and hopefully internationally one day.

Noon said eight employees from the Noon management team will join the start-up, while the rest of the company’s employees were offered positions with TruGreen. The Noons will be co-CEOs of the new operation with Christopher focusing more on the sales and marketing side and Matthew on the vision and strategy. Their longtime CFO Stephanie Lee will focus on finance and operations.

While Noon has a non-compete with TruGreen in Noon’s existing territories, which was a couple of counties, the plan right now is to start franchising along the East Coast to as far west as Illinois and then expand into the midwest and south.

Noon said it was a difficult decision to sell the company he and his brother started from scratch at the end of 2007, but he was impressed with the new TruGreen leadership team and vision for the future.

“They were concerned about our employees, and very concerned about our client base and quality we were offering,” he said. “We felt great about the deal. It’s never easy because you are emotionally attached to clients and employees. We started with nothing and put our heart and soul and life into it. So it was tough to part ways but we knew we had another plan in line, sort of our second act.”

– Brian Horn

New way landscape acquires tierra verde landscape

In a whirlwind seven-day acquisition, New Way Landscape & Tree Services in San Diego purchased Tierra Verde Landscape, a $4-million company in Huntington Beach, Calif.

After Tierra Verde’s owner, Allen Chariton died on July 24, his wife wanted a quick sale, according to Randy Newhard, New Way’s owner. Newhard agreed to the deal on Aug. 22 and shut down Tierra Verde on Aug. 28. Newhard kept 30 of Tierra Verde’s 74 employees, and 35 of its approximately 137 maintenance jobs.

“We had a team of 12 New Way employees at (Tierra Verde’s) old office performing a job fair, inventorying equipment and trucks, changing names on trucks, and had a mobile lab there to do physicals, e-verify and administering drug tests,” Newhard said.

“Potential employees were interviewed and were called on Sunday to start Monday. This deal all happened basically within a seven-day period. Acquisitions should usually take four to eight weeks.”

Newhard said he was attracted to the business because of its tree care services and its presence in Orange County.

“We have a book of business in Orange County and this acquisition added to that portfolio. Plus it added an immediate list of new management companies we could potentially do business with,” he said. “Plus, they had a tree division and they also performed arbor care work for all their maintenance acts. We have had a plan to expand our San Diego tree company into Orange County and this made an immediate impact for that expansion.”

This is the second acquisition Newhard made this year, acquiring a competitor’s book of business and employees in Inland Empire north of San Diego, earlier this year.

“We also had a book of business there and wanted to expand in that area,” he said.

Newhard said he is now looking at another deal in San Diego, which he plans to do a little slower than the Tierra Verde deal. He said the company will move to a new facility in October of this year.

“It has been a challenge to execute this all in a basically seven-day period,” he said. “If not for my daughter Kathryn Dejong who is president and runs the operations, along with the rest of our staff who jumped in with both feet to get this up and running, I don’t know if we could have pulled it off. Actually, I know we could not have.”

New Way Landscape was number 88 on Lawn & Landscape’s 2015 Top 100 list with revenue of $17.5 million and 235 employees.

– Brian Horn

Artistree rolls out ‘Thank A Landscaper’ program

Sometimes the smallest gestures have the biggest impacts.

Like the gift of coconut bread and jam, which were given to ArtisTree Landscape Maintenance and Design as a unique way of thanks.

The company had been asked to help transplant fruit trees that were being removed from the future site of a sales center.

The landscape chairman of the homeowners association board didn’t want to see the trees destroyed, so he asked ArtisTree to transplant them around the community. As a way of thanking ArtisTree, the chairman and his wife made bread and jam from the trees. This gesture sparked ArtisTree’s new program, Thank A Landscaper, which was launched in the spring (thankalandscaper.com.)

It gives people the chance to thank anyone that has had an impact on their experience with the green industry.

“We want to go quietly into neighborhoods and transform their properties and maintain them well, but it would be nice to be acknowledged,” said Debra Morrow, vice president of marketing.

The company decided to start an initiative to thank landscapers for the work they do.

A photograph taken of Orlando Otano Ramon, one of ArtisTree’s crew members, was turned into an artistic card and given out to people to raise awareness to the program.

At the site, people can click a tab and thank any individual or company.

“If people have a more positive perception of landscapers, whether degreed or not, designers or not, manufacturers or not, we can all go down the river together and benefit from the positive perception,” she said.

– Katie Tuttle