In this Lawn and Landscape article, Pat Covey, president and COO of Davey Tree, discusses Davey's approach when it comes to mergers and acquisitions.
Posted: July 19, 2016
After making 20 acquisitions between 2010 and 2014, Davey Tree took a breath in 2015 and 2016, but will again be looking to grow through M&A in 2017.
“We had to take a step back and make sure everything was functioning correctly,” says Pat Covey, president and COO of the company, which ranks third on lawn & Landscape’s Top 100 list with 2015 revenue of more than $820 million. “It’s good to take a little pause.”
Covey says one word to describe the company’s approach to M&A for the end of this year and into 2017 is “prospecting,” with deals expected.
Lawn & Landscape caught up with Covey during a visit to Davey Tree’s headquarters in Kent, Ohio last week and learned some tips on how to approach M&A.
Form a relationship. Aside from looking at the nuts and bolts of a deal like financials, Covey says the first action executives take when investigating an acquisition is meeting with the owner. Getting to know the owner on a personal level gives good insight into how the company is run and how the employees approach the job, Covey says. “Nine times out of 10, the company follows the seller,” he says. Some acquisitions take more than three years, and a good chunk of that time is the two parties becoming comfortable with each other. “Every seller has different reasons they’re selling,” Covey says. “Getting to why they want to sell the business is important.”
Do the simple research. Doing something as easy as looking at a company’s website or driving by after they have completed jobs can give you a good idea on the company culture and how employees serve customers. Pay attention to how the uniforms are maintained, if employees have uniforms, and keep an eye on how the trucks are maintained.