Maximizing a merger

© Steve Smith

The day after competing landscape contractors, Ben Helton (left) and Bob Wheeler (right), agreed to merge their companies to form Cutting Edge Landscape in 2015, Wheeler shared a daunting statistic with his new partner. He told Helton that 90% of mergers fail within the first few years. The co-presidents laugh about that now. Although the journey hasn’t always been easy, they’ve managed to overcome the odds and make their merger successful. So far, they’ve defied the statistics by doubling their revenue within three years, as they begin to expand beyond the Boise market.

Here’s how Helton and Wheeler put their differences aside to tap into new levels of growth that they never could have achieved alone.

Divide and conquer.

Although their prior companies both served the same commercial clients in Boise, Wheeler and Helton each brought diverse backgrounds to the merger. Wheeler started his business, Cutting Edge Lawn Company, in 1995 with a process-oriented focus on operations.

Helton, meanwhile, started mowing lawns as a teenager and then incorporated after graduation, launching Total Maintenance Solutions in 2007. Focusing on sales and fast-paced growth, he grew to roughly the same size as his seasoned competitor within just a few years.

Our December 2015 cover story (bit.ly/CuttingEdge15) detailed how Helton and Wheeler finally joined forces. Looking back now, four years later, they realize that their differences were key to the merger’s success.

“We took the divide-and-conquer approach,” Helton says. “We definitely stick to our lanes – Bob taking the operational and fleet management role, and I took the sales, marketing and customer relations role. Staying in our corners really helped, because if you try to share all the responsibilities, you’re just going to butt heads and disagree.”

To clearly delineate their responsibilities, the partners used an integration task list to break down business segments and document their respective focus areas. For example, account managers eliminated many operational duties and could focus purely on customer satisfaction, estimating and communication. Although disagreements still happened, they learned to respect each other’s strengths to find compromise.

“I heard once that if two partners agree, there’s no reason for the partnership,” Helton says. “The basis of any disagreement we had was how to grow and how fast to grow, so we both had to loosen up a little bit. I had to learn that Bob was okay with growth as long as certain criteria were met. I had to refrain from taking some customers I otherwise would have, and Bob had to take on some customers he wouldn’t have.”

With Helton pushing for growth and Wheeler holding back to focus on operations, the partners struck a balance to grow strategically.

After merging at a little over $10 million in combined revenue, Cutting Edge, which is 100% commercial with almost an 80% focus on maintenance while the other 20% is construction, hit $20 million within three years.

“Our blend of philosophies allowed us to grow at a healthy pace where (operations) can keep up with the sales team,” Wheeler says. “Together, it’s a better model than either one of us had before.”

Specialized workforce.

The co-presidents applied the same divide-and-conquer approach throughout the rest of the company by clearly communicating everyone’s job descriptions. Instead of eliminating any positions, the merger encouraged employees to grow into new roles.

“Everyone was able to get more specialized – wearing fewer hats, focusing on their strengths, and not having to change responsibilities on a daily basis,” Helton says. “We didn’t lose any managers, and average pay increased 20% for those individuals. So, for the employee base, it was a great career advantage. We’ve doubled revenue without increasing employee count.” Growth allowed employees to advance, taking on more responsibility than either company could have offered before the merger.

“I think a lot of our managers were probably underutilized in our old systems,” Wheeler says. “As you grow and you delegate more responsibility, you see those people grow and blossom into a new role.”

Growth beyond Boise.

Helton always had a vision of growing beyond the Boise market, and he’d already begun building a subcontractor model to serve large commercial clients with properties outside of Idaho. With Wheeler focused on local operations, the partnership freed Helton to pursue expansion.

“The market’s only so big, so I knew we were going to be capped on our growth if we just stayed in Boise,” Helton says. “We have a fairly large market share and a strong leadership team, and sometimes the sandbox can get a little too small.”

Cutting Edge began eyeing potential acquisitions around 2017. Finally, in October 2019, they announced their acquisition of Community Landscape Services, a $3.5 million firm in Salt Lake City. The owners already knew each other well because the company had been subcontracting for Cutting Edge for several years.

Still, acquiring a company in another state presented different challenges than the merger. “You don’t hear the chatter in the office,” Helton says. “It takes a more methodical approach, more scheduled meetings and more planning.”

However, they applied lessons learned from the merger to make the acquisition go smoothly by synchronizing operations and branding out of the gate.

“The first step was transitioning their financial reporting and accounting systems into our Boise office,” Helton says. “The next step is to implement our proprietary operating system. That will provide us visibility into their contracts, their routing and other KPIs we need to see to help them run their business.”

After seeing how new uniforms and branded trucks instantly unified the Cutting Edge team post-merger, Helton prioritized rebranding with the acquisition, which will adopt the Cutting Edge name.

Websites and social media accounts were integrated and new uniforms and marketing materials were delivered within just a few weeks of announcing the acquisition.

Connecting the dots.

The acquisition is critical to Helton’s vision of “connecting the dots through the inner mountain west,” to fill the gaps around Boise from Washington and Oregon down to Salt Lake, and eventually up into Montana.

“The more branches you have in markets that mirror your customers’ locations, the stronger your proposal will be,” Helton says. “Some customers aren’t comfortable with the subcontracting model, so having a branch in Salt Lake (shows) customers that you can handle the geographic reach.”

Helton and Wheeler continue vetting more companies to grow the Cutting Edge family. Next, the duo is actively looking to expand its footprint into the Denver market through additional acquisitions. Cutting Edge’s acquisition strategy does not involve drastic staffing changes or cuts.

“This is a people business,” Helton says.

“You can’t go into a company and gut the operation folks and sales reps, because it’s not going to work. You need to help them with their systems and processes, and everything else will come together.”

Hitting the pavement.

Meanwhile, Cutting Edge has also grown organically by diversifying its offerings. Over the past year, the company added asphalt services that include lot sweeping, sealcoating and striping.

“With any commercial building is going to come parking lot services, so it seemed like a good add-on to help our existing clients,” Wheeler says. With only a couple other competing asphalt businesses in the Treasure Valley, Cutting Edge saw an opportunity to scale its processes and clientele into a new market.

“It’s the exact same client as the landscape buyer, so we have all the customers we need to start an asphalt division,” Helton says. “We realized we had all the systems and processes, we just needed to add that service.”

Cutting Edge hired a consultant that specialized in the asphalt business, who helped recruit and train employees to launch the division a year ago. Since Cutting Edge already subcontracted some parking lot services, Helton sat down with subcontractors to explain that bringing the service in-house wouldn’t necessarily exclude them from the growth. “We don’t foresee their volume of work going down, and in many cases, it hasn’t,” Helton says. “We still utilize subcontractors for scheduling conflicts or capacity needs.”

National expansion.

Local growth and regional expansion haven’t slowed Helton’s subcontractor model. In fact, the growth enabled him to launch a nationwide facility maintenance service division – leveraging a network of partners in other states to provide services ranging from landscaping and snow management to asphalt services, pest control, power washing and other exterior maintenance.

“We feel we’re the best procurement of landscape services because we are landscape contractors,” Helton says. “Oftentimes you’ll see companies that don’t own any equipment or have any real experience; they just manage work orders as aggregators who facilitate the process, but they’re not really tradesmen.

We can offer better service to our clients because we actually self-perform every service that we subcontract, so having knowledge of the trade helps us provide better results.”

The facility maintenance division, which has its own website at cuttingedgefm.com, currently makes up about 10% of Cutting Edge’s business, with the anticipation that it will comprise 30% in the next 18 months. Helton expects the division to double in 2020 and again in 2021.

Investing in growth.

Of course, Cutting Edge’s growth hasn’t come without struggles.

“The biggest challenge to growth has been labor,” says Helton, noting that Cutting Edge utilized H-2B for the first time last season to bolster local labor. Although it was successful, they don’t want to rely too heavily on the program, instead pursuing more sustainable recruitment solutions.

Several years ago, Cutting Edge hired an HR manager and then an employee relations specialist. These roles focus on keeping employees happy and attracting new talent, which are critical components of growth that Wheeler and Helton can’t afford to overlook.

“At the time, it felt like an overreach or an excessive position, but in hindsight, we should’ve done it a long time prior,” Helton says. Wheeler and Helton also invested in a new facility that added 12,000 square feet to their Boise footprint in 2017.

Initially, the addition was necessary to accommodate the newly merged teams – but over time, it proved to be a valuable tool for attracting new talent, too.

“I don’t think we could have hired the high-level positions we’ve hired, whether it be the HR manager or the CFO, if they came to a metal shed,” Helton says.

“Don’t skimp on appearances, because there are intangibles that come along with that. People want to come to a nice place to work, so having a nice facility has been a contributing factor to our success.”

The author is a freelance writer based in Ohio.