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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
888-229-5740
The Principium Group |P.O. Box 414 |Cordova, TN 38088
Thank you!
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