Should I Sell My Landscaping Business To A Competitor?


There have been significant changes in the market for buyers and sellers of privately held companies in the U.S. in the past 18 months and the landscaping industry is experiencing similar challenges.  The combination of higher interest rates and market volatility increase acquisition financing costs, resulting in lower valuations for sellers.  As we’ve noted before, the SBA has increased its lending rates and lenders are applying increased scrutiny as they underwrite loans. 

The good news is that despite these economic challenges, there are still buyers for companies of all sizes in the landscaping industry.  The industry remains fragmented and many private equity buyers still have “dry powder” to invest.  Technology is transforming the way companies work with reduced costs, better analytics, and improved collaboration.  Buyers seek sellers operating quality companies, then apply technology and best practices to reduce costs and attract new customers.   

What does a competitor want to buy? How might that be different from another type of buyer? 

A competitor wants to achieve some synergy by purchasing your company.  They may want your employees, your specific services that they are not currently offering, your clients, your processes, especially if you have a reputation for a niche they are interested in and, of course, your profits.  A competitor will sometimes be willing to pay more than another buyer because what you have to offer is so close to something they want, and they don’t have to take the time to build it themselves or suffer through the risks of making it work. When they buy your company, they also remove their best competitor for those services.  

What’s important to a competitor when seeking to acquire a company in their desired space? 

  1. Whatever that company is seeking or may be missing.   In most cases you may have a “hunch” about what that might be.  In others, you may hire an advisor to do some reconnaissance.   If you have a best in the market product or service that fits well with your business, runs well, and makes a good profit, you may appeal to a competitor. 
  2. Employee noncompete and contracts. 
  3. Client contracts and service agreements that are transferable. 
  4. Intellectual property, if applicable.   
  5. Working capital, including accounts receivable and inventory.  
  6. Owner’s noncompete
  7. Strong representations and warranties in the purchase agreement. 
  8. Percentage of seller financing.  Could be up to 30%. 

It’s always a good idea to have an overview of your competitors, especially if you are considering selling your company.  I recommend you keep a competitor map up to date as a part of your strategic planning. What are your unique offerings and how does that compare to your competition?  Are you poised to add a service that would delight your customers and draw in new?  Should you consider buying your competition?  

Whether you are seeking to sell to a competitor or to buy one, if you would like to discuss this topic, please feel free to contact me. We’d be happy to have a confidential complimentary conversation with you about these or any other exit/sales/buying issues.

You can reach me via email: [email protected] or on my cell phone a: 224-688-8838.  

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Alison Hoffman

has more than 25 years of experience in strategy, operations, mergers and acquisitions and delivering business-to-business client solutions. Her areas of expertise include managing operations for profitable growth, organizational design and strategy activation. She brings a wealth of experience through her work in evaluating, valuing and purchasing over 30 companies, leading company-wide cultural and business integration projects and consolidating best practices among business processes and corresponding computing systems. Read Full Bio