McKinney grows landscape portfolio

February 22, 2013 -  By

Late last year McKinney Capital, a Birmingham, Ala.-based private equity firm, added to its portfolio of landscape companies when it bought Grounds Unlimited, also based in Birmingham. Terms were not News_McKinneydisclosed.

The intent is to merge Grounds Unlimited with Landscape Workshop, which McKinney acquired in early 2012, by the end of the year, Sam Eskildsen, managing director of McKinney Capital, told Landscape Management. Memphis, Tenn.-based Environmental Landscape Service, acquired in September 2011, also was rolled into Landscape Workshop last year.

“We’re in the process of building a regional platform in the Southeast based around the Landscape Workshop brand,” Eskildsen said.

As is the case with ELS, Grounds Unlimited’s management will stay in place.

“We recognize that in the grounds management space, relationships drive the business,” he said. “We very much want to keep those relationships, that’s why we prefer to partner with the existing team, and we’ve managed to achieve that in most cases.”

For “add-on” companies like ELS and Grounds Unlimited, McKinney looks for those with 80 percent or so of revenue coming from commercial maintenance clients. Landscape Workshop has a construction division that services the other locations if necessary.

McKinney, whose portfolio includes many service-based businesses with mobile workforces, hopes to grow the Landscape Workshop brand by adding one or two companies a year. Right now it’s targeting Memphis; Birmingham; Huntsville, Ala.; Tuscaloosa, Ala.; Jackson, Miss.; Nashville, Tenn.; and Chattanooga, Tenn.

Eskildsen says McKinney isn’t a “traditional” private equity firm, meaning it doesn’t operate with a highly leveraged model.

“That allows us more flexibility,” he said, explaining the company is completely funded by the McKinney family and doesn’t take on limited partners who need their investment back within a specified time period. “We’re a family-based private equity company. It’s private equity by any stretch of the imagination, but we take a longer view. Our charge is to build great businesses and we don’t ever have to exit these if they’re great businesses.”

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LM Staff

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