Monarch Landscape Holdings plans to come out of the gates quickly, making several more acquisitions by the end of 2015.
Monarch is a new, private equity-backed firm formed by ValleyCrest Cos. veteran Brian Helgoe. His sights are set on consolidating landscape companies on the West Coast. Last month, Monarch made its first purchase when it bought Signature Landscape Services, a Redmond, Wash.-based company with 150 to 200 employees. The company declined to share revenue figures.
Helgoe, who serves as CEO of both Monarch and Signature, expects to complete two or three more acquisitions by the end of the year.
“We want to find mid-sized, $10 million to $50 million, primarily maintenance companies that have a reputation for customer service, quality and a tenured management team that’s excited about the opportunity to build and become part of a regional company,” he said.
When asked about comparisons to others that have tried to consolidate landscape companies in the past, such as TruGreen LandCare in the late 1990s, Helgoe said Monarch is different.
“We’re going to be very careful about whom we acquire, so there’s a similar mindset and excitement around wanting to grow into a regional company,” he said. “We’re going to leave operations in the hands of the companies, continue to invest in our customers and our employees and, at the same time, we’re going to protect ourselves from former owners competing with us.”
The latter will be accomplished with noncompete agreements, Helgoe said.
In five years, the goal is to be “a significant regional competitor on the West Coast,” he said, although he declined to provide a revenue target.
Another intention is to “create the best company for a professional landscaper.”
“I want to create a business where if you’re at the top of your game, your first choice of a company to work for will be ours,” Helgoe said. “That’s the model I was taught by (the late ValleyCrest founder) Burt Sperber: If you care most about your people and your customers, some magic happens.”
Background
Helgoe has a background in both horticulture and business, including nine years at ValleyCrest. He got his start working at the University of California-Riverside’s Botanic Gardens as an undergrad student and “fell in love” with gardening. Next, he worked for five years at Filoli, a site of the National Trust for Historic Preservation, as lead horticulturalist. From there he went to business school at The University of Pennsylvania Wharton School and made a stop at McKinsey & Co., then landed at ValleyCrest in 2005. At ValleyCrest he did stints in the residential, maintenance and construction divisions, before becoming vice president of operations for ValleyCrest Landscape Development and then vice president of the maintenance division’s Mountain and Northeast regions.
Helgoe left the company in July after its merger with Brickman. He declined to provide details of the separation, but he said he considered a few options in the landscape industry before seeking out a private equity fund to help create a regional landscape company on the West Coast. Once he identified One Rock Capital Partners as his private equity partner, he started looking for companies to acquire. He was connected to Signature by business broker CCG Advisors, which specializes in the landscape industry.
“They just have a great business up there, focused on building relationships with customers,” Helgoe said of Signature. “It seemed like a great place to start.”
Additionally, he said the Pacific Northwest was an ideal entry point because it’s a fragmented, high-margin market.
Mark Henning and his partners at Signature decided to seek exit opportunities last year. They spoke with several other buyers before agreeing to sell to Monarch.
“We’d like somebody to add value to the legacy of what we’ve created and continue to grow it,” he said. “Of all the firms we talked to, we felt Monarch had that notion to continue to grow the value and size of the company and maintain the integrity of what it’s become.”
Henning and former General Manager and partner Greg McDonald stepped back from the company a month ago. Former partner Doug Hart will stay on for six to nine months to assist with the financial transfer, and former partner Linda Fox will remain with Signature to handle marketing. Will Bailey, former operations manager, is now Signature’s general manager and has an ownership stake in the company.
Henning agrees that Monarch will be different from others that have pursued consolidation strategies in the landscape industry.
“We all know what kind of mistakes they made,” he said, adding he was close to selling to TruGreen LandCare 15 years ago. “What Brian Helgoe’s company is planning to do is very different. It’s not focused on being a sales organization. It’s focused on how to provide a really good service and develop customers that are with you for the long term. That’s the essence of a good business, having repeat customers who say good things about you.”
