1/11/24
Topic: Home Service Industry Roll Ups & What They Mean for You
Hosts: Dan Gordon & Donnie Shelton
In this episode we discuss:
The prevalence of private equity firms acquiring home service industry firms, including pest control, lawn care, HVAC and more
How this trend is driving up valuations
Is this different than the Sears or Waste Management expansions into pest control?
How lawn care valuations have increased over the last two years
Why Donnie used to be a lawn care "hater" but has changed his mind
Differences between the pest and lawn businesses
A look at two big home services companies: Neighborly and Authority Brands
The potential end game for these firms — going public?
Why home services are attractive to private equity firms
Why Dan says the pest and lawn markets will always be fragmented
Dan's view that some private equity firms aren't getting sufficient organic growth
Why owners are choosing to sell to private equity firms
The concept and benefits of rolling equity
Tax intricacies of rolling equity
Some downsides of selling to private equity
Who's a good fit for private equity buyers
How to prepare to sell to private equity (or any buyer), whether you're selling soon or sometime down the road
How to think about selling from an owner's perspective
Resources mentioned:
Article Dan wrote for PCT Magazine about private equity: "Private Ayes"
Notable: "There are probably hundreds of these PE firms who are kicking tires. Probably a quarter of them are serious and committing real capital." —Dan Gordon
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