Green Acquisitions-Growing Lawn and Landscape Businesses With Acquisitions - 2014 - Ron Edmonds-The...

GREEN ACQUISITIONSRon Edmonds

GREEN ACQUISITIONSGrowing Your Landscape or Lawn Care Industry Business with Acquisitions -

How to Succeed in Negotiating Acquisitions that Grow and Strengthen

Your Business

Ron Edmonds

Steps in the Acquisition Process

Develop Strateg

y

Identify &

Qualify Targets

Negotiate the Deal

Develop Integratio

n PlanClose the Deal

Assembling Your Acquisition Team•Key members of management•Merger & acquisition advisor•Your accountant•Your lawyer

Growth StrategyAcquisitions vs Organic

Growth

In some cases, acquisitions can be less risky than pursuing organic growth.They may be a faster, cheaper and less uncertain approach.

ACQUISITION STRATEGIES

WHAT ARE YOU TRYING TO ACCOMPLISH?

Expand YourMarket Share

Target a New Market

Expand Your Geographical Reach

Add Productor Service Lines

Some More Strategies

•Address people issues – add talent•Secure a location•Upstream acquisitions – suppliers•Downstream acquisitions – customers•Neutralize competition•Others

One Acquisition Can Relate to More Than One Strategy…adding a new market and a new service

Acquisition Strategy:Proactive

vs

Opportunistic

ACQUISITIONTARGETS

Good Acquisition Targets Are Hard to Find

Profiling an Ideal Target

Locate Potential Targets

•Personal knowledge of the market•Networking and trade associations•Directories•Other research tools•Advisors

Screen Acquisition Candidates

•Candidates that seem to match ideal characteristics•Candidates with a reason to sell

Most potential targets are more valuable to their owners than they are to a buyer.

Why are targets interested in selling?

Retirement, Health, Divorce,Partnership Dissolution,Spouse Issues, Tired

Contacting Potential Targets

•Direct contacts•Contact through an intermediary•Mail campaigns•Advertising for targets

Qualifying Potential Targets•Public information•Networking•Meetings and interviews•Questionnaire•Chemistry•In-depth due diligence *

* Continues throughout process

Negotiate the Deal

Pricing & Valuation•Cash flow of the business •Return on investment

•Strategic value•Financing implications•Impact of terms•Competitive issues

Terms•Payment terms•Seller financing•Holdbacks and escrow arrangements

•Purchase price adjustments•Representations & warranties•Employment terms•Noncompete provisions•Other important provisions

Documentation

• Letter of intent (or Term Sheet)•Definitive Agreement (usually

an asset purchase agreement)•Related documents (note,

noncompete agreement, employment agreement, etc.

The Integration PlanBlueprint for What Happens Next

The Integration PlanOrganization Chart

The Integration Plan

Employees

The Integration PlanFacilities

The Integration PlanVehicles & Equipment

The Integration PlanAccounting

The Integration PlanMarketing Plan

The Integration PlanBilling & Collections

The Integration PlanInformation Technology

Important Steps in the Acquisition Process

•Acquisition Strategies•Identifying & Qualifying Acquisition Targets•The Deal – Price, Terms, Deal Structure•The Integration Plan

Resources•Principium Group website (www.principiumgroup.com)•Newsletter – Green Industry Merger & Acquisition News•Books:•Charting a Course – Acquisition Strategies for Lawn &

Landscape Companies•Green Exit –Exit Planning for Lawn & Landscape Business

Owners

www.PrincipiumGroup.cominfo@principiumgroup.com

888-229-5740

The Principium Group |P.O. Box 414 |Cordova, TN 38088

Music: Credit: “Jupiter The Blue” (by Gillicuddy)

Thank you!