Industry Insight
Mergers & Acquisitions
Stories about large corporations gobbling up their competitors is nothing new. But did you know the hottest sector in mergers and acquisitions is in your own backyard? That’s right – access to a sought-after demographic and a consistent revenue stream has made the business of residential landscape design and maintenance the “new darling of the market”.
Many local landscaping companies you see around your neighborhood are being bought up by hedge funds and private equity firms. But you would never know it, until now. Tom Lupfer, former President of the Illinois Landscape Contractor Association (ILCA) and Founder of Lupfer Landscaping Company, shares his unique perspective on this industry trend and its impact on businesses and homeowners.
“As the owner of a local landscaping company that’s been entrenched in our community for over 30 years, it’s great to see money come into the industry. But as a life-long resident and industry guy, it’s hard to see those long-time owners leave. The accumulated knowledge that’s lost every time an owner sells is impossible to replace.”
Acquisitions follow various business models. According to Tom, there’s a specific acquisition strategy impacting locally owned residential landscaping companies that is cause for concern. “Basically, what happens is an investment company buys an established residential landscape business, removes the owner, and doesn’t replace them. Then they “standardize” the work, which means less customer service and limited knowledge about the land they’re cultivating,” Tom explained. “Then, the investment company pumps up the numbers and sells the package to another private investor. It’s all about their return-on-investment.”
An increasing number of companies are selling out. Many times, the result is not only less personalized service and lower quality output, but sadly, less community engagement too. “These new owners aren’t on the ground with their clients and crews, like me and the few owner-operator colleagues that are left. These investors are in an office somewhere, nowhere near our community let alone at a customer’s house.”
Now that you’re aware of this trend, it’s important to know who’s actually behind the brand that you’ve entrusted to bring your landscaping vision to life. Names of the original owners may still be on the trucks and uniforms, but the original owner may no longer be associated with the company. That human, personalized touch is gone. Thankfully, that’s not the case at Lupfer Landscaping. “When you hire Lupfer Landscaping, it’s my name on the truck and I’m the person my customers work with. Residential landscape design and maintenance is a very personal service. We help create outdoor settings where families and friends will gather, photos will be taken, and memorable moments will be shared and cherished for generations to come.”
When deciding who to hire for your landscaping needs, ask if the company is owner operated. If the name on the truck doesn’t belong to the owner of the company, you may want to hedge your bet on a locally owned and operated landscaping firm instead.
“I know my clients and they know me. I grew up here and my roots go deep in this community. I still have my very first customer,” Tom said. “Years ago, another of my customers asked me to do a special “sprucing” for her daughter’s first communion. I just did another special “sprucing” for the same customer, for her daughter’s wedding.”