The enterprise value specialists at Ceibass are out there in the lawn and landscape marketplace speaking with business owners about how to increase the value of their businesses and how to prepare their businesses for sale.
“One of the things that we are picking up from talking with the owners we meet with is that with the rise in interest rates, reoccurring pandemic fears, high inflation, and the overall defensive mood of the economy that now is not a good time to consider buying or selling,” said Tom Fochtman, Ceibass CEO. “Nothing could be further from the truth. Yes, deal flow may be slightly lower year over year, but we are still at historic highs. Historic highs! Private equity has record levels of dry powder. Investors are bullish on our industry and M&A activity is strong.”
The Ceibass team went on to distinguish favorable characteristics that buyers are looking for in the green industry, including:
- Best operating practices
- Enticing profit margins
- Highly renewable contracts with good companies
- Economies of scale can create big cost savings
- Grass grows, lawns must be cut. Snow must be cleared.
- Weeds grow, mulch must be replaced
- Homes and buildings are being built and must be landscaped
- Trees need care and pruning
- Good solid management practices make a big difference
- Route density increases efficiency/reduces costs
- New technology and new thinking can create significant competitive advantages
- Investors are looking for “solid,” “understandable” investments
- Labor shortages will be remedied
“The bottom line is that now is the time to consider your exit strategy. Don’t think M&A activity is dormant. Even if you are not considering selling, at least start getting your business ready for sale with better practices,” added Tom. “Who knows? You could get an offer you can’t refuse. Get serious about improving your business. Buyers are out there, and they are motivated.”
