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2014 M&A GUIDE Questions to ask yourself Keep these queries in mind when you consider your M&A options. By Ron Edmonds 76 FEBRUARY 2014 large companies more aggressively looking for add-on acquisitions and other private equity investments in smaller companies in the industry, while some regional companies use acquisitions to build their footprints. One thing is clear, M&A activity is cycli- cal and hard to predict. These cycles reflect external factors such as the economy and interest rates, the health of the industry and reactions to past M&A activity. Even today, while landscape services companies are becoming popular for acquisitions, the market for lawn care companies is weaker with TruGreen on the sidelines. Right now, we have some additional fac- tors coming into play that business owners would be well-advised to consider. Because the level of M&A activity in the industry has been relatively limited for the past few years, there are likely to be many business owners who would like to be able to transition their businesses who have not yet done so. In addition, the aging of the baby boomer generation is expected to increase the number of potential sellers significantly over the next few years. Other business owners may con- sider exiting their businesses over such politi- cal issues as Obamacare, immigration reform and an increase in the minimum wage. Since M&A activity is cyclical and we can- not predict the future, business owners must consider their future plans and take steps to position themselves and their businesses for the best possible outcome. If a sale is ultimately in your plans, it is wise to be able to make a move when an opportunity arises. Here are some questions you may want to ask yourself as you consider your options. ARE YOU READY TO SELL YOUR BUSINESS? This is a much more complicated question than it sounds. It takes some soul searching and, often, reflection, analysis and planning to answer it. I like to break this down further into two sub-questions, addressing two different facets of readiness: mental readiness and financial readiness. We will address them individually. © THINKSTOCK.COM O nce again, there is a high level of interest in mergers & acquisitions (M&A) within the lawn and land- scape industry. There are a variety of factors causing that high level of interest. There have been some high profile transactions announced, includ- ing the acquisition of Brickman by KKR and the acquisition of a controlling interest in John Deere Landscapes by Clayton, Dubilier & Rice (CD&R). In addition, CD&R has been reconfiguring its investment in Ser- viceMaster by spinning off TruGreen as a separate company, all in anticipation of some sort of “liquidity event.” These events have focused investors on the green industry, which seems poised to receive more investment capital in anticipation of growing opportunities as the economy strengthens and construction rebounds. While these transactions involve some of the largest companies in the industry and are not at all representative of what smaller business owners can expect, the increased interest in the industry is likely to have a very positive effect on M&A in the industry over- all. The ripple effect will likely include some