Deal Review – Commercial Landscaping Company
Asking Price: $2,450,000
Annual Revenue: $3,200,000
Annual Profit (SDE): $765,000
Business Model: Recurring Commercial Landscaping Contracts
Geographic Focus: Southeastern U.S. (Metro + Suburban Coverage)
Client Base: HOAs, Property Managers, Light Industrial Parks
Asset Class: Service + Equipment + Route Territory
Executive Overview
This deal involves the proposed acquisition of a recurring-revenue commercial landscaping business that has operated for over 12 years in a growing southeastern metro region. The asking price of $2.45M on $765K SDE results in a 3.2x multiple well within reason for a company with multi-year contracts, asset-backed equipment, a full team in place, and a dominant local market presence.
With a client mix including 40+ HOA and commercial real estate clients, the business services approximately 200 total properties under fixed-schedule contracts. The services include lawn maintenance, irrigation repair, seasonal plantings, light arbor work, mulching, snow clearing (seasonal), and exterior hardscape upkeep. All major revenue is under written contracts or POs.
The company owns and includes over $800K in well-maintained equipment in the asking price, and it has a clear route and crew structure with managerial redundancy. For a buyer in the green industry, facilities services, or with a portfolio of route-based businesses, this acquisition offers both a stable cash-flowing asset and strategic bolt-on infrastructure.
Deal Structure and Terms
Sale Type: Asset Sale
Asking Price: $2,450,000
SDE: $765,000
Revenue: $3.2M
Profit Margin: ~23.9%
Assets Included: $800,000 in equipment and vehicles
Contracts: 3-year rolling maintenance contracts (most auto-renew)
Employees: 38 FTE including 3 crew managers, 2 ops coordinators
Facilities: 1 leased operations yard with office & equipment depot
Owner Time: ~15 hours/week – finance, pricing, large bid meetings
Training Period: 60 days included, 90 days negotiable
Seller Financing: Open to 10–15% on standby note or balloon structure
Real Estate: Not included (leased facility – assignable lease)
Service and Client Breakdown
Recurring Services:
Weekly/bi-weekly lawn cutting
Seasonal pruning and hedge maintenance
Irrigation system monitoring and repair
Mulching, planting, and weed control
Snow removal (5 clients, generating $110K/year)
Client Types:
26 HOA clients under multiyear contracts
12 commercial office park properties
3 light industrial parks
5 seasonal municipal bid contracts
Client Tenure:
70% of revenue from clients over 5+ years
Churn is ~8% annually, mostly due to real estate changes (e.g., property sold or HOA board turnover)
Largest client = 9.8% of revenue; 2nd largest = 6.3%
All accounts have scope-of-work documents, schedule sheets, and site maps digitized in Google Drive and assigned to routes in LMN (landscaping software suite).
Financial Overview
With $765K in seller discretionary earnings and $3.2M in top-line revenue, this landscaping firm operates at a healthy 24% margin well above industry averages due to its optimized routes, cross-trained crews, and minimized travel times.
Expense Breakdown:
Payroll & Wages: $1.52M
Equipment Maintenance: $68K
Fuel & Transport: $94K
Supplies & Plant Materials: $154K
Facility Lease & Utilities: $36K
Insurance & Admin: $50K
SDE Adjustments (Owner Salary): $100K addback
The business collects 96% of payments within 30 days due to standardized net terms and strong AP relationships. All clients are invoiced monthly via QuickBooks and Square with automated reminders and penalties for late payments.
The seller maintains full financial records, including three years of P&L statements, tax filings, payroll summaries, and bank reconciliations. A full financial package is available in diligence.
Operational Details
Team Overview:
3 route supervisors (each manages ~12-person crews)
2 office coordinators (one handles scheduling, one handles invoicing and bids)
32 field techs (landscapers, mower operators, irrigation techs)
Owner – finance, pricing, supplier relations, strategic bids
Crews are dispatched from a central depot with GPS-logged vehicles. Daily job sheets are prepared by the office coordinator using LMN and Slack for dispatching.
Technology Stack:
LMN (routing, quotes, CRM, timesheets)
QuickBooks Online
Slack (crew comms)
Google Drive (site maps, bid templates)
Square (client payment interface)
Asset Overview (Included in Sale):
7 zero-turn mowers
5 trailers (new within 4 years)
6 trucks (Ford F-250s and 1 diesel stake bed)
Power tools, hedge trimmers, seeders, snow plows
Irrigation diagnostic kits & winterization tools
All equipment is owned free and clear. No equipment debt transfers with the sale.
Transition Support
The seller offers 60 days of structured handoff, which includes:
Ride-alongs with each crew manager
Introduction to all HOA boards and property managers
Training on job cost estimation and bidding formulas
Supplier contact lists and pricing models
Access to route planning archives and renewal schedule templates
CRM walkthrough and renewal call sequences
Seller is also willing to support on a part-time paid consulting basis for 3–6 months, including assistance with large RFP bids or expansions.
Growth Opportunities
1. Expand Snow Services:
The company has equipment for plowing but only services five properties. Scaling this with seasonal contracts could add $150–$300K in winter revenue with minimal investment.
2. Add Enhancement Crews:
Currently, the business handles basic planting but outsources major hardscaping. Forming an enhancement division (e.g., patios, retaining walls, stone work) could boost revenue by 15–20%.
3. HOA Amenities Services:
Several clients request pool maintenance, trash pickup, and lighting repair outsourcing this or bundling it under one invoice could increase contract size by 25%.
4. In-House Tree Division:
Tree trimming and removal is currently subbed out. Training two in-house climbers or contracting an arborist could retain this $100K/year in lost margin.
5. Bid on Municipal/School Work:
The seller hasn’t pursued major public sector bids. There are open tenders in the region for median mowing, park cleanup, and athletic field prep. These are stable and bid at 3–5 year intervals.
Risk Factors
1. Labor Dependency:
Like most landscaping businesses, this one depends on seasonal labor availability. Visa programs (H-2B) and wage inflation could challenge margins.
2. Route Compression Risk:
New regulations or traffic changes could increase crew transit time. Currently optimized but subject to urban growth.
3. Equipment Aging:
While most equipment is well-maintained, two trucks and several mowers are 5+ years old. Buyers should model future CapEx.
4. Churn from Property Sales:
HOA board turnover or property manager consolidation may affect retention. Contracts are good, but the buyer must maintain strong client rapport.
5. Weather Variability:
Severe weather seasons can increase costs or disrupt service windows. Snow revenue is bonus—but dry or rainy years impact seasonal plantings and labor balance.
Ideal Buyer Profile
Landscape Roll-Up Firm: Seeking route density and a reputable brand
Commercial Property Services Buyer: Plumbing, cleaning, pest control firms wanting to cross-sell to shared clients
Entrepreneurial Operator: With field team experience and operations management capacity
Blue-Collar Private Equity: Looking for strong cash flow with asset backing and service redundancy
Franchise or Multi-Unit Owner: Already in home services looking to vertically integrate landscaping
Deal Structuring Options
While the seller prefers a full cash exit, there is some flexibility:
90/10 Split: $2.2M at close; $245K in 12-month note at 6% interest
SBA Financing Eligible: Clean tax returns and asset base make this SBA 7(a) eligible buyer would likely need $250K–$350K down
Holdback: $150K contingent on retention of 90% of revenue at 6 months
Earnout Clause: $200K tied to adding 3+ new HOA clients in 6 months
Equity Rollover: Seller retains 10% for a growth-based second exit in 24 months
Conclusion
This commercial landscaping business offers stable, asset-backed cash flow with long-standing contracts, trained staff, and regional brand dominance. With a full-service team, redundant route planning, and multiple growth levers, it’s well-positioned for a new owner to scale through upsells, snow services, and strategic enhancement work.
Acquisition Summary:
Profitability: 9/10
Asset Value: 8.5/10
Client Stickiness: 8.8/10
Growth Potential: 9.2/10
Risk Level: Moderate (labor + seasonal)
Deal Flexibility: 7/10
