buying another LCO-need advice

Discussion in 'Pesticide & Herbicide Application' started by cutting crew, Dec 11, 2006.

  1. cutting crew

    cutting crew LawnSite Member
    Posts: 19

    This is my first post. I have a 14 yr old company in Colorado and have been approached by another LCO to purchase their accounts. We are mostly a maintenance company who fertilizes our own commercial accounts. Want to move into the residential lawn care a little more and thought this would be a good opportunity. Here is the rub! It is around 900 customers, but a few years back they split it and sold it to two individuals. Now they are in the process of taking the two halves back due to various reasons. This kind of makes my wife and I nervous. Do you think these clients have a bad taste in their mouths now? What would you pay for this? We were thinking of having a clause about cancellations after May would be deducted from the price(or something along those lines). Their equipment is pretty old and probably not worth a whole lot. Mostly just a client list. They said they would help in the transition with letters along with their prepayment cards. We need to roll on this soon, so any info or suggestions would be most appreciated!!!
     
  2. TurfProSTL

    TurfProSTL LawnSite Senior Member
    Posts: 693

    How can this LCO take back what he previously sold?

    I'd be very leary of this deal.....
     
  3. carcrz

    carcrz LawnSite Silver Member
    Posts: 2,085

    Was their a non-compete clause in the sale? You could sue them for lost income.
     
  4. cutting crew

    cutting crew LawnSite Member
    Posts: 19

    It was an owner carry arrangement and without the buyer making timely payments or skipping some payments they are "taking it back". I have NOT bought this yet and am just in negotiations with them currently. My attorneys will definately be looking over the deal before we sign anything. I want it legally back in their hands before I even touch it!! My main concern was the decrease in value in the second selling(second change of ownership). How many customers jumped ship the first time and how many more will jump ship the second!!??
     
  5. carcrz

    carcrz LawnSite Silver Member
    Posts: 2,085

    I think they will be looking around as soon as they get wind of another change. If you have addresses, make a sales call (but don't tell them about the future sale). Might as well get your foot in the door before they close it on you.
     
  6. DUSTYCEDAR

    DUSTYCEDAR LawnSite Fanatic
    from PA
    Posts: 5,134

    it all depends what they r asking for money wise?
    100 bucks a customer 500?? all depends on that.
    if something doesent seem right dont do it just my thoughts.
    however u have the upper hand on this as they r trying to sell a damaged product at this point due to the previous deal so use that to your advantage in pricing also it seems they dont want to run it and have to find a buyer so good luck.
     
  7. cutting crew

    cutting crew LawnSite Member
    Posts: 19

    Thanks all. We will see what happens. This site is an EXCELLENT source of just about any info one could want. I will be in here often!!
     
  8. lawntennis

    lawntennis LawnSite Senior Member
    Posts: 416

    You might want to talk to the guy that owns it now.
     
  9. dcondon

    dcondon LawnSite Silver Member
    Posts: 2,246

    No way would I even think of buying those accounts. I bet most of them will cancel before you ever do any services.:nono:
     
  10. cutting crew

    cutting crew LawnSite Member
    Posts: 19

    Definately will include a clause for first year cancellations where I can deduct those off the purchase price! As for the guys who own each half now, I don't think they will give me the time of day knowing I may be taking over their accounts.
     

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