Case Study

Diverse landscaping and hardscaping distributor

Case study

The Company is a leader in the distribution of outdoor materials. Many customers are landscaping service companies buying materials for customer projects. Company operated an energy business to keep staff busy in the cold months. Operated a mining operation in Maine to acquire materials for sale. Operated a trucking firm to control procurement costs and transport mined materials. Operated an organic business to acquire raw materials to manufacture topsoil. Each of these operations contributed to the greater organization, which made the business complex yet nicely profitable.
What made the business attractive to Buyer?
  • Significant player in the distribution of outdoor landscaping materials, including stone, sand, mulch, and decorative items in southern New Hampshire.
  • Quality of the business site.  Owners developed a first-class property.
  • Mining Operations – Company operated their own mining operations to provide key materials.  With the buyer’s other operations, this was an attractive source of materials for their other operations as well.
  • Location of business’ customers (New Hampshire, New York) dovetailed nicely with the buyer’s other locations in Pennsylvania and further south.
  • Seller had efficient operations to control costs and have ample supply of materials.
Challenges
  • The business was highly vertically integrated.  Several buyers wanted one aspect of the business but not all aspects.
  • Very large operations, with many moving parts hard to easily understand.
Why did the owner want to sell?
The owners started the business with a truck. Then grew to a truck and yard, then slowly to 20 acres in NH, 270 acres in Maine, a location in NY to procure and store materials from PA. After a lifetime of growing the business, they earned the right to retire on top.
Process

Greg prepared an in-depth package telling the story of each division and how it contributed to the bigger picture. Included in the package were financials specific for the division, including allocations for administrative expenses paid by the parent company. Greg worked with the seller’s accounting team to produce information we knew would answer questions buyers would ask. Greg also prepared a one-page summary of the opportunity which was shared with industry peers. At the same time Greg researched ownership companies making acquisitions in the space. Several were backed by private equity and were being aggressive. After working with a dozen or so buyer groups, Greg narrowed the pool to three which seemed the best fit. After receiving IOI which were acceptable, Greg invited the three buyers for an on-site tour and meeting with management. After these meetings Greg solicited final offers and negotiated an LOI exciting to all parties.

Results
The Owners successfully sold their business as a consolidated entity, enabling them to successfully retire in a single transaction, rather than piecemeal the divisions over a longer period to multiple buyers. Business is a strong fit for the buyer group’s mandate, a growing company for the key employees to be a part of and a near all cash deal for the sellers. A Win-Win-Win.