Last week, Tom Fochtman, Ceibass CEO, took two days of “meet & greets” with private equity (PE) investors, owners, executives, lenders and advisers to lower to middle market companies at the Rocky Mountain Corporate Growth Conference sponsored by the Association for Corporate Growth.
His focus? To stay aware of the heartbeat of the market for lawn & landscape business owners looking to sell their businesses. Here are some of his insights:
This year’s conference was the biggest ever…huge. There is a lot of lower to mid-market money, institutional and otherwise, looking for an investment with the promise of enhanced returns.
The steady stream of reoccurring revenue, and high contract renewal rates of commercial lawn & landscape companies is very attractive to investors.
2018 will be another strong year for M&A activity with the market favoring sellers. Chop, chop, baby.
PE money is not an option for most landscape companies due to their smaller size. Bare minimum seems to be around $15,000,000 for a platform-like purchase – whereby a purchaser is buying a company to grow it organically and through acquisition. Most firms are looking for a minimum of $3,000,000 in adjusted EBITDA.
HOWEVER, once PE enters the market by purchasing a platform company, these strategic buyers will buy other companies of any size in their quest for growth. This could be your opportunity, if you’re a smaller company.
Stay tuned, more insights to come next week!