Every time I check my email, there’s another press release announcing an acquisition. These announcements seemed to be coming in at a higher rate than in the past. That was confirmed when I was editing our Insider section, which is a collection of news items that starts on page 6, and it was all M&A news from both the landscaper and manufacturer sides. It made me wonder what the future holds for M&A in the industry. So, I reached out to some industry experts and here’s a summary of what they said:
• Last year was incredibly active and 2022 will continue this pace, if not exceed it. While there is a lot of interest from private equity companies, independent companies will also be in on the action.
• Landscape M&A activity is not as mature as pest control or HVAC, but it’s getting there.
• The reoccurring and sizeable revenue from commercial maintenance companies is attractive to private equity companies, but commercial construction is also on their radar, and residential maintenance is becoming more popular.
• There’s a number of reasons why there is some much interest, including the reoccurring revenue I mentioned above. A lot of Baby Boomer owners want to sell, and some owners in general are looking for an out because of the lack of labor.
• Potential tax changes will motivate buyers and sellers to complete deals before the changes go into effect. Also, with interest rates rising, some buyers will try and close deals while they can access funds at lower rates. The rates are going up, but no one knows how high and for how long.
Overall, the consensus is that there’s never been a better time to sell, and that’s what I’ve been told for the past couple of years. Even if you don’t plan on selling in the near future, hopefully you have an exit plan in place so when you do put the “for sale” sign up. It’s an-easy-as-can-be process.
— Brian Horn
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