As the number of acquisitions made in 1998 and 1999 mounted, the most commonly discussed companies were TruGreen and LandCare USA, which ultimately became one organization, now known as TruGreen LandCare.
During that same time, another company entered the landscape industry via acquisition with a few significant deals between Atlanta and Philadelphia. That company, Omni Facility Services, set out to be a “true one-stop shop” for commercial property managers, according to then-CEO Betty Browne.
“One-stop shopping is growing based on customer demand, and this is a trend that is only growing in strength,” Browne explained in late 1999. “We saw the outsourcing of services move from an experiment in business management to something that is a given in the corporate environment.”
Omni jumped into the industry with both feet, acquiring $7-million Heyser Landscaping in Philadelphia, The Morrell Group, which was a $15-million organization in Atlanta, the $3-million Spring Garden in Ijamsville, Md, and $3-million Smith-Fox, Philadelphia, Pa. These deals allowed Omni to care for clients properties inside and outside their buildings, which complemented the company’s other service offerings of mechanical and electrical maintenance, commercial janitorial, food sanitation and architectural maintenance.
Once these deals were complete, however, the company stopped making acquisitions and turned its attention toward integration these businesses into its other operations. Now, two years later, Omni is seeking acquisition opportunities that will enable it to bolster its landscape presence.
“The exterior marketplace has been shuffled through by the likes of TruGreen, so what we’re looking for is the independent company that doesn’t necessarily have to sell but would like to be part of something of quality and of good management strength that they can gain from,” explained Dick Cottrill, the current CEO who took over from Browne in September 2000. “We think there’s great room for landscape companies where everything is quality and you don’t have to question integrity, especially since there are some huge conglomerate operations that have come off the rails and aren’t sure what they want to do or focus on right now.”
Cottrill said Omni’s plan doesn’t involve coast-to-coast locations or call for the company to be the biggest firm in the industry. “We just want to offer an uncompromising service for which people are prepared to pay, and I think there is room in most major markets for a top-quality company that class A property managers are prepared to pay for,” he related, adding that Omni remains open to making acquisitions in its current markets as well as new markets. “Initially, I think we’ll concentrate on the area from Washington, D.C., south to the Florida line and west to the Mississippi River.”
Building more of a regional presence will still allow Omni to compete for the prized national contracts that other consolidators have talked about using their national network of locations to pursue, according to Cottrill. “In the past, it has been easy to assume that if you're a national company you'll be able to get national accounts,” explained this service industry veteran who spent 35 years working with Orkin and Rentokil.” I think our best customers are better than that because they know that a national company doesn’t necessarily deliver the same level of service nationwide.”
Cottrill also thinks the company’s focus on creating one company out of the earlier acquisitions before purchasing additional businesses strengthened it for the future. “I think I learned that approach in my Rentokil experience,” he commented. “Over the years in interior landscaping and pest control, I made more than 70 acquisitions. One of the key things I learned is if the company was a good company, it was a good company for one reason – the quality of the ownership. I have always striven to keep the owner if he or she wants to stay, certainly for a length of time because that's the secret, that’s where the jewels are kept – in the owner’s mind.
“Some owners don't want to stay around, and that's fine, but the one thing you must not do is give the owners the impression you know more than they do,” Cottrill continued. “In this business, as in others, entrepreneurs have different approaches to what might seem to be the same outcome. It is important to learn them all so the team doesn’t need to reinvent the wheel. We’re looking to combine our experience with these owners' experience so we can really achieve a strong product.”
Like other companies purchasing landscape firms, commercial maintenance work is what Omni prizes, and Cottrill is also open to potentially purchasing interior landscape companies if they’re located in a current Omni market. “We probably wouldn't go into a new market for interior because there are more exterior customers with an interior need than there are interior customers with an exterior need,” he noted. “You may have 15 interior customers in an office building who have nothing to do with the exterior landscaping.”
Some people may be surprised to see anyone interested in spending money on acquisitions in the midst of such an unpredictable economy, but Cottrill isn’t concerned about the market for landscape services. “I have a great deal of confidence in all of the business streams that we're in,” he maintained. “With the exception of interior landscaping, they are all necessities – the lawn has to be mowed, for example.
“I think we’ll see construction and refurbishment cut back for obvious reasons, but I believe that if you can deliver a quality product worth paying for the customers won’t just go for cheap,” he added. “For a customer to go for a lower price, the service provider must provide a reason – primarily quality. However, if a c then cannot differentiate its service delivery from its competitors’ service deliver, however high, then price comes into play. Consequently, it is those companies that can forge strong relationships based on quality, deliver and trust, that can command top price in a market.”