The Brickman Group to be Sold

Discussion in 'Landscape Architecture and Design' started by desii, Jan 25, 2007.

  1. desii

    desii LawnSite Member
    Posts: 193

    The Deal.com recently reported that Lehman Brothers has engineered a deal for Leonard Green & Partners LP, Los Angeles, to buy the Brickman Group Ltd., in a $847 million recapitalization. The Deal , an online product of The New York Times, reported that it learned of the proposed transaction through regulatory filings.

    Founded in 1989, Leonard Green & Partners L.P. describes itself as “a pioneer” in the development of the leveraged buyout industry. “We have repeatedly demonstrated our ability to successfully originate, negotiate, consummate and realize investments in a variety of different industries and economic environments,” it says on its Web site. “We partner with management to enhance the value of companies through operational improvements, acquisitions, financial engineering and other strategic initiatives.”

    According to the The Deal, the founding Brickman family owns 54% of the company, other managers 10% and CIVC Partners, Chicago, holds 36% of the company. CIVC acquired its stake in the company in a leveraged recapitalization in 1998, the same year that then 35-year-old Scott Brickman became CEO of the company. That infusion of venture capital allowed the Brickman Group, led by Scott Brickman, taking over from his father Richard Brickman, to aggressively grow its network of branch locations across the country by acquisition.

    In 2002 the company went through its second recapitalization through a $150 million senior subordinated debt offering, according to The Deal.

    Long-envied by other landscape operations for its efficient services delivery systems, the Brickman Group recorded revenues of approximately $100 million in 1998. Today the company’s 135 branches with 6,000 employees in 35 states, generated about $460 million in revenues its latest fiscal year.

    Two of the company’s most notable recent acquisitions included Lakewood Landscaping, Troy, MI, and, this past fall, Mike Rorie’s Groundmasters, the market-leading landscape maintenance operation in the tri-state area surrounding Cincinnati, OH. Sources put the sale price at approximately $30 million.

    The Deal reported that the Brickman management team will remain in place.
     
  2. AintNoFun

    AintNoFun LawnSite Bronze Member
    Posts: 1,807

    man those are some big numbers. i think i read somewhere that micheal dell is a major shareholder in valleycrest now..
     
  3. mrusk

    mrusk LawnSite Gold Member
    Posts: 3,260

    Yes michael dell's private invesment company is the leading shareholder of valley crest.
     
  4. Team Green L&L

    Team Green L&L LawnSite Member
    Posts: 5

    I live in the Ground Master's relm. I have seen them blow up over the past decade because I actually lived within rock throwing distance of their first office adn know some of the foreman. I do know for a fact that Mike has built the company from the ground up. The first year in business Ground Master's only did $38,000 in gross sales, but this was in the late 80's. They saw tremendouse potential in the suburban growth around the Cincinnati area in the early to mid 90's and pownced on it. Ground Master's way of doing business was agressive. Most of their contracts were multi year contracts from the beginning. They did not sign yearly contracts, and also did not mess with C and D class properties. The only way they signed contracts is if they got to take care of everything, not just mowing but the whole 9 yards. They teamed up with some of the premeir home builders, then aquired all of Proctor and Gambles business and the rest is history. It seemed like by last year you saw a Ground Master's truck parked in every Commercial property around the Tri-county area. At the time he sold the business he had 5 locations from northern Kentucky to Columbus OH. and was doing about 30 million a year in gross sales. Out of the office by my house they did 10,000 yards of mulch a season on average just as an example of the volume of business they did.
     
  5. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    I wonder what Mike thinks of the acquisition? He does not seem like the kind of guy that is ready to ride off into the sunset with his cash or conform to others management styles. Hope all works out for him.
     
  6. turftrimmer

    turftrimmer LawnSite Member
    Posts: 11

    Its amazing how anyone would want to buy out such a low balling company as Brickman. They came into the Cincinnati area, in Blue Ash, and dominated sales in ground maintenance for the past 4 years at least. Before this everything was Groundmasters, Davey tree, Prolawn Proscape, Mike Ward, Lawn Systems, Fredricks... Groundmasters was the biggest and best for the commerical business. The point I'm trying to get is that they (brickman) came in here with all of these well established landscape co.'s and still took over the majority of the market. What are there profit margins? They must be minimal because theres no way they could have come here for two years and became the majority share holder of commerical grounds maintenance without being a lowballing company. When you are all ready almost a nationwide landscape company is there a need to lowball. Maybe we should raise MINIMIUM WAGE:usflag:. Or then would Brickman just have a company with no profit margins just gross wages.
     
  7. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    When you are that large you have the economy of sale working for you. I have to make my wage on 5-7 guys but with good business practices I could oversee 30 so my wage could be divided over 30 workers as opposed to the 7.

    If you consider the office systems one payroll person can do 30 or 3,000 paychecks they make the same money. Then consider how much cash they are sitting on before they deposit the tax money they are gaining interest on that.

    I know I pay 60.00 per hour for service work on my equipment. They have mechanics working for 15-18 per hr.

    Then there is the land. They have been in business so long that many of their facilities are paid for. How much less could you charge if you were not paying a mortgage or leasing land for the biz?

    Then there is their purchasing power they pay less for fertilizer than my distributors I would bet. They grow many of their own plants for install work.

    I could go on but you get the picture.
     
  8. anj

    anj LawnSite Member
    Posts: 167

    I Saw One Of Those Trucks In My Area Today. I Did Not Think They Would Come So Far South.
     
  9. RyanVT2005

    RyanVT2005 LawnSite Member
    from VA
    Posts: 17

    They didn't buy Brickman. They are a capital investment firm meaning they are willing to pay Scott Brickman and the company that money to reinvest in the company in the hopes that in 5, 10, 15 years, whatever the time frame might be Brickman would have grown and made a profit for them on their original investment
     
  10. RyanVT2005

    RyanVT2005 LawnSite Member
    from VA
    Posts: 17

    Brickman doesn't low ball anything. Most of the company is run at a 35-55% gross margin. Throughs years of experience, economy of size and efficiency there are able to compete in any market they decide to move into.
     

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