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Consistently Profitable Commercial Landscaping Maintenance Business For Sale

Calgary, Alberta, Canada
Asking Price:
$1M - $5M (CAD) Furniture / Fixtures and Inventory / Stock included
Sales Revenue:
$1M - $5M (CAD)
Cash Flow:
$500K - $2.5M (CAD)

Founded in 2007, this company is a firmly established business that provides a diverse suite of landscaping, snow removal, and related services exclusively to commercial clients, with many on multi-year commercial maintenance contracts.

Thanks to its diverse service offerings, high prior success rate, and excellent reputation for quality service and client care, the company has enjoyed large amounts of referrals and repeat
business. As a result, the company has been consistently profitable since its inception, boasting very attractive average EBITDA margins of up to 30% historically.

The largest segment of the company’s revenues are derived from commercial maintenance contracts, accounting for between 70% and 80% of total revenues year to year. Currently the company has over 30 active commercial maintenance contracts, extending to as far as 2025.

Due to time and energy restraints, ownership has decided to sell the company to someone who can further capitalize on the reputation and growth opportunities present. With an experienced management and admin team in place, as well as other value drivers such as competitive insurance rates, the ability to compete for and win bids without sacrificing margin, capital equipment in good working order, and a competitive, long-term lease in place, etc, this company is sure to make a great investment.

Property Information

Real Estate:

Lease

Lease Terms:

Triple net; currently year three of a five-year term, with options to renew for two more five-year terms.

Leasehold Rent:

$86,000 (CAD) per annum

Location:

The company operates out of a leased space located central to major roadways making it accessible for staff, and convenient to reach client premises in a timely manner.

Premises Details:

The premise consists of 4,400 square feet. The property is owned by a related holding company, and there is a long-term lease in place at a competitive fair market rate. The company is currently in year three of a 5-year term, with the option to renew for two more 5-year terms. Management estimates that current capacity allows for operational growth of approximately 25-35%, with an option to take on more yard space from the neighbouring tenant.

Size in square feet:
4,400
Planning Consent:

Current capacity allows for operational growth of approximately 25-35%, with an option to take on more yard space from the neighbouring tenant.

Business Operation

Expansion Potential:

There is ample room for expansion. Approximately room for 25-35% growth with current operational capacity, and plenty of opportunity to continue adding maintenance contracts. Management's time and energy have been constrained with personal matters and second business, which is why they are looking to transition out.

Competition / Market:

While the barriers to entry are low for landscape companies in general, management feels new entrants to the industry typically find it easier and therefore tend to focus on residential clients. This company has created a significant competitive advantage over new competitors, focusing solely and successfully on commercial clients. The company has earned a strong reputation in the commercial marketplace, which has allowed them to successfully compete on tender without winning bids on price alone. Their reputation has also led to significant repeat business, with some clients remaining with them since 2008.

Management feels that further competitive advantages are the quality of service they provide, including but not limited to their response time to client requests, and the level of client care and communication provided by management and in-field staff to their clients. The company’s ability to service multiple locations at once also sets them apart from smaller operations. In addition, the company’s use of technology and reporting tools helps them to maintain accuracy and efficiency when bidding on projects, and gives them the ability to provide deeper, more meaningful data and insights to clients.

Furthermore, this company's affordable commercial insurance rates provide a strong barrier to entry against new competition. Whereas it is difficult to obtain new coverage at a reasonable price for landscaping, and particularly for snow and ice management, the company’s consistent and positive safety track record has led to achieving favourable rates that allow the company to remain profitable without needing to increase service pricing in proportion with the drastic rise in insurance costs across the industry. According to the company’s broker, the company can expect a minimal increase in rates at their next renewal in May 2022.

Reasons for selling:

Time and energy restraints, due to personal matters, and second business that is growing quickly.

Employees:
Currently 8 (varies with season and number of sub-contractors used)
Years established:
15

Other Information

Support & training:

Yes, management is willing to provide transition and support.

Furniture / Fixtures value:
$450,000 (CAD) - included in the asking price
Inventory / Stock value:
$8,000 (CAD) - included in the asking price
Related Documents:

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