Looking for successful acquisition stories

Discussion in 'Business Operations' started by BrendonTW, Oct 22, 2017.

  1. BrendonTW

    BrendonTW LawnSite Senior Member
    Male, from Oklahoma City
    Messages: 693

    I’m curious to know if you guys or gals have made any successful acquisitions in your businesses. I’m interested in doing this eventually. Primarily looking to buy clientele to buy for our weed control and fertilizer division but may want to grow our maintenance division in the future as well. Just depends on the circumstances of the deal, contracts, etc. I would love to hear your experiences, how you funded the purchase, did you purchase assets, did employees come, and if so, how was the culture merging experience?

    Thanks for any stories.
     
  2. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,231

    Hey Brendon - I have responded to many of these threads, but have something new to add on culture.

    I tried a new format last week to our weekly manager meeting - only division managers, meeting facilitator and myself - no office manager, controller, production supervisors or HR at the meeting. Felt I could start some very open, honest and direct conversations with a smaller group that might feel more comfortable acknowledging where they were stuck.

    There was unanimous agreement from the group that I have not done the best job on boarding new companies employees into our culture. I assumed right or wrong that my leadership team looked at acquisitions and the employees that came with them as an opportunity, not a threat - way wrong! Every single division manger felt like the new employees were a threat to take their job. One of my responsibilities over the winter will be to document a process based on best practices we have learned over the last 3 acquisitions. We have a working document we use internally and with the seller that spells out the steps needed when making an acquisition - not one mention in that document on the impact for new or existing employees.

    Happy to share the the document we currently use if interested.
     
    grassmonkey0311 and hort101 like this.
  3. BrendonTW

    BrendonTW LawnSite Senior Member
    Male, from Oklahoma City
    Messages: 693

    Thanks for your input. I would be interested in seeing that. How often do you make acquisitions? Do you approach other owners or do they approach you? What size acquisitions do you typically make? (Compared to pre existing revenue)
     
  4. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Messages: 1,783

    My only story was one that tanked. Bought 200k worth of business and end up retaining 30k of that. I could explain more but you wanted success stories. That isnt one.
     
  5. BrendonTW

    BrendonTW LawnSite Senior Member
    Male, from Oklahoma City
    Messages: 693

    I would like to hear more of that. I just didn't want the thread to be flooded with a bunch of "I bought 10 accounts for $1000" type stories.

    What happened with that deal?
     
    grassmonkey0311 and knox gsl like this.
  6. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,231

    Luckily, I have never made a mistake as a business owner.
     
    Efficiency likes this.
  7. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,231

    Edit the above:
    Luckily, I have never made a mistake as a business owner between 7am-7:09am this morning.
     
  8. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Messages: 1,783

    Just think, there are other time zones too. So you have 9 minutes of every hour to be perfect.
     
  9. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Messages: 1,783

    I dont remember exactly what I paid, but I bought the maintenance accounts of a guy going thru a divorce and his wife was forcing the sale.

    First problem in hind site was buying over the winter - I believe it was in December or January that we signed the deal.

    He got his full check upfront (2nd mistake) at the attorneys office. He didnt keep his non-disclosure agreement and subsequently told him employees that they would be part of my company come March. There were 5 employees at that point. One still works for me. The other 4 joined up in pairs and started 2 new businesses and took almost every residential client in the transaction. I can only think of 2 residential accounts that stuck with us.

    We did retain almost every multi family and commercial account since my assumption is they couldn't just go knock on the client's door like they did for the residential accounts. My guess is they took the old, pay us less, cut out the new middle man approach like we see so many new guys posting here. I was really upset at the time.

    The seller kept doing a handful of snow accounts and he kept a plow truck at his house. It took restraint not to stick a rag in the gas tank and light it on fire. I thought about it many times. But really, now about 8 years later, I see that it was my poor execution and lack of vetting the seller that cost me my dollars. I finally found peace in the fact that I learned a LOT thru this and my appreciation was that there were not more zeros involved in the deal.
     
    terracecut and hort101 like this.
  10. BrendonTW

    BrendonTW LawnSite Senior Member
    Male, from Oklahoma City
    Messages: 693

    Sounds like you took an expensive class. That’s what I’m hoping to avoid. Sorry about the rough time with that deal! I don’t think I would ever be interested in buying residential maintenance accounts. Maintenance commercial and lawn care residential/commercial.
     

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