POST by Stephen Gregory, Senior Consultant: We’ve been seeing some very interesting M&A (Mergers and Acquisition) activity in an industry not generally regarded as ‘corporate’, lawn care and landscaping.
Here on the Cape we were all excited to see the sale of Maffei Landscape to Chenmark Capital Management, a Maine-based family investment firm. The company was founded by Bob Maffei while a student at Barnstable High School in 1991. His trucks and employees are a familiar sight to Cape residents, and Bob is very active in the community. He plans to remain the company’s CEO through this partnership.
“I’m thrilled that what began as cutting grass to pay for college has grown into a team of more than 100 employees,” Maffei said.
We ran across a similar story about Lawn Dawg, another ‘local’ landscape company, which was bought by TruGreen, which posted $1.3 billion in 2016 revenue. The two sales came about a month apart.
Lawn Dawg, which had 10 branches throughout Maine, Massachusetts, New Hampshire, Connecticut and New York, had more than 100 employees and posted more than $14 million in 2016 revenue. Jim Campanella, president, started the company in 1997 after his previous company, Barefoot Grass, was acquired by TruGreen.
Brighton Partners, a private equity firm based in Nashua, New Hampshire, had acquired a 70 percent stake of Lawn Dawg in 2009, according to a 2009 Lawn & Landscape. Links to that story HERE.
The similarities between these two sales is striking – hard-working guys building small businesses that became attractive to venture capitalists in an industry dominated by small, mom and pop operations. In the case of Bob Maffei, he’s sticking around for a while as CEO, whereas Jim Campanella is in the ‘wash, rinse, repeat‘ phase – build it, sell it, do it again. But they both built something legal, solid and most importantly, something that can be sold.
Some competitors of Maffei or Lawn Dawg ‘fly below the radar‘, employing undocumented workers, paying ‘under the table’, carrying no or inadequate insurance and using questionable tax strategies. These two guys did it another way, and it paid off – if either were unable to work again in this field, they would probably be OK.
At Senior Business Consultants LLC we spend a lot of time talking with guys like Bob and Jim, working to build their businesses to be solid and successful, viable enterprises which can be sold or transferred to a succeeding generation. It isn’t easy – there are no guarantees of success, there will be sacrifices and it can be very tempting to choose another path. But in the event of death or incapacitation of the owner, retirement, burnout or just wanting to do something different, something of value remains – for you, your family, for the guys who worked with you along the way.
If you have chosen the other path, generally it’s not too late to change — but you have to choose.
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