Two large landscape and snow service providers in the Twin Cities are now working together. On Nov. 1, Reliable Property Services formed a strategic partnership with Lawn Ranger of Eden Prairie, Minn.
Reliable, based in Eagan, Minn., picks up key staff and assets from its former competitor. Terms were not disclosed.
“We’re excited about this opportunity and we think it will benefit Reliable as a whole,” Tom Hougnon, COO of Reliable Property Services, told Landscape Management.
Deals like this one and last year’s acquisition of several divisions of The Bruce Co. are part of Reliable’s goal to become a $50 million to $70 million company over the next decade, Hougnon said. The company, which operates five branches plus a golf maintenance division, expects to wrap up 2014 with $30 million to $32 million in annual revenue.
Reliable ranked No. 40 on the 2014 LM150 list of the landscape industry’s largest companies, based on 2013 annual revenue of $27.1 million. Lawn Ranger reported 2013 annual revenue of $9.1 million, ranking No. 135 on the LM150 list.
Because the arrangement is a partnership and not an acquisition, Lawn Ranger remains a standalone company. Owner/founder Joe Unger will operate it as a smaller entity doing specialty work, such as tree services and trucking, Hougnon said.
Unger also will consult with Reliable over the next six months, as six key staff members transition to the Reliable family. Together, they’ll work to sign over Lawn Ranger clients to contract agreements with Reliable, he said.
Hougnon said Reliable should retain about 50 percent to 60 percent of Lawn Ranger’s annual revenue. The balance will drop off due to accounts that didn’t resign with Lawn Ranger and contracts that fall outside of Reliable’s core business, he said.
“It’s important to make sure the face of Lawn Ranger, Joe Unger, is part of our team; he’s such a value in this market,” Hougnon said. “We are still carrying on the Lawn Ranger tradition.”
Reliable also gets some assets from Lawn Ranger and will rent its facility in Eden Prairie for five months, staging some snow operations there this winter. Hougnon expects as many as 50 Lawn Ranger field employees will join Reliable.
Expansion opportunities
Looking ahead, Hougnon said Reliable is always looking at partnership and acquisition opportunities.
“We’re a very strong company financially, so when opportunities like this come up, we can jump on them right away,” he said. “We did this one to not only bring in revenue but better us as a company, as far as bringing in key people and key customers.”
The Reliable team evaluates about 15 to 18 companies a year, Hougnon said, noting the company’s ownership wants to see growth and profitability. Reliable has been owned by investment group PCM Cos. of Eagan, Minn., since 2002.
Reliable plans to grow in Upper Midwest markets and adjacent regions. Hougnon names Northern Illinois, Omaha, Neb., and Madison, Wis., as potential expansion sites.
“We want to grow wisely and profitably,” he said. “We want to have our feet on the ground in the location we’re servicing. The majority of our work is work we’re managing hands on.”
