Green Acquisitions-Growing Lawn and Landscape Businesses With Acquisitions - 2014 - Ron Edmonds-The...
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Transcript of Green Acquisitions-Growing Lawn and Landscape Businesses With Acquisitions - 2014 - Ron Edmonds-The...
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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
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Steps in the Acquisition Process
Develop Strateg
y
Identify &
Qualify Targets
Negotiate the Deal
Develop Integratio
n PlanClose the Deal
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Assembling Your Acquisition Team•Key members of management•Merger & acquisition advisor•Your accountant•Your lawyer
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Growth StrategyAcquisitions vs Organic
Growth
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In some cases, acquisitions can be less risky than pursuing organic growth.They may be a faster, cheaper and less uncertain approach.
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ACQUISITION STRATEGIES
WHAT ARE YOU TRYING TO ACCOMPLISH?
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Expand YourMarket Share
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Target a New Market
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Expand Your Geographical Reach
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Add Productor Service Lines
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Some More Strategies
•Address people issues – add talent•Secure a location•Upstream acquisitions – suppliers•Downstream acquisitions – customers•Neutralize competition•Others
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One Acquisition Can Relate to More Than One Strategy…adding a new market and a new service
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Acquisition Strategy:Proactive
vs
Opportunistic
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ACQUISITIONTARGETS
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Good Acquisition Targets Are Hard to Find
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Profiling an Ideal Target
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Locate Potential Targets
•Personal knowledge of the market•Networking and trade associations•Directories•Other research tools•Advisors
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Screen Acquisition Candidates
•Candidates that seem to match ideal characteristics•Candidates with a reason to sell
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Most potential targets are more valuable to their owners than they are to a buyer.
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Why are targets interested in selling?
Retirement, Health, Divorce,Partnership Dissolution,Spouse Issues, Tired
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Contacting Potential Targets
•Direct contacts•Contact through an intermediary•Mail campaigns•Advertising for targets
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Qualifying Potential Targets•Public information•Networking•Meetings and interviews•Questionnaire•Chemistry•In-depth due diligence *
* Continues throughout process
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Negotiate the Deal
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Pricing & Valuation•Cash flow of the business •Return on investment
•Strategic value•Financing implications•Impact of terms•Competitive issues
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Terms•Payment terms•Seller financing•Holdbacks and escrow arrangements
•Purchase price adjustments•Representations & warranties•Employment terms•Noncompete provisions•Other important provisions
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Documentation
• Letter of intent (or Term Sheet)•Definitive Agreement (usually
an asset purchase agreement)•Related documents (note,
noncompete agreement, employment agreement, etc.
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The Integration PlanBlueprint for What Happens Next
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The Integration PlanOrganization Chart
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The Integration Plan
Employees
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The Integration PlanFacilities
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The Integration PlanVehicles & Equipment
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The Integration PlanAccounting
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The Integration PlanMarketing Plan
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The Integration PlanBilling & Collections
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The Integration PlanInformation Technology
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Important Steps in the Acquisition Process
•Acquisition Strategies•Identifying & Qualifying Acquisition Targets•The Deal – Price, Terms, Deal Structure•The Integration Plan
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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
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888-229-5740
The Principium Group |P.O. Box 414 |Cordova, TN 38088
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Thank you!