EBITDA Multiples for Landscaping Companies: 2023 Report
The following report provides averages for EBITDA and revenue multiples being offered for private landscaping companies in Q4 2023. Our research team came to these averages using a combination of industry reports, private equity networks, and interviews with M&A professionals. (Sources)
The tables below show average EBITDA and revenue multiples for landscaping businesses, broken down by industry subsector as well as EBITDA and revenue range.
EBITDA Multiples for Private Landscaping Companies, Q4 2023
|Company Type||EBITDA Range|
Revenue Multiples for Private Landscaping Companies, Q4 2023
|Company Type||Revenue Range|
The following sections detail the state of M&A for landscaping companies in 2023, complete with predictions for 2024 from our research team:
The State of Landscaping M&A
Compared to many other home services companies, landscaping M&A has not experienced severe slowdowns over the last few years. The consistency of the market is due, in part, to its decentralization; the top 50 landscaping companies make up roughly 20% of the total market share. With the remaining 80% consisting of smaller companies as well as the higher interest rates over the last two years, the drive for both strategic and financial buyers alike to implement consolidation strategies has greatly increased.
Second, several subsectors of landscaping companies have proven remarkably resilient in the face of economic downturn. Nurseries and garden centers, for example, actually saw a small rise in multiples during the pandemic of 2020 as more people became more interested in hobbies like gardening. Landscape supply companies experienced a similar bump in EBITDA multiples during this period.
As a result, the landscaping industry has proven significantly more resilient than other industries, as the graph below exhibits:
M&A buyers appear to value these companies differently depending on several factors, the first of which being location. Our data suggests significant geographical influence on recorded EBITDA multiples. The highest value areas our team identified included:
- Coastal areas with high population density and higher income.
- The continental south, due to longer landscaping seasons.
- Urban areas with high numbers of businesses and residential areas.
Another significant factor affecting valuations and multiples for landscaping companies is the nature of their operations. For example, construction-based landscaping companies (design, hardscape, tree removal) have performed less favorably in recent years due to a lack of recurring revenue. By contrast, acquirers are valuing maintenance-based businesses (commercial, residential, supply) much more highly due to what they see as a more sound investment.
Regardless of type, however, landscape companies are experiencing heavy buyer competition. Our research indicates that landscape M&A is split about 60/40 between financial and strategic buyers, respectively. Both these types of buyers, however, appear to be purchasing companies with the same goal of consolidation in mind.
Our team has made the following predictions for landscape M&A moving into 2024:
- Construction activity will drive commercial valuations. We’ve seen the effect of the “return to the office” movement in several other industries, and landscaping is no different. As companies return to the office in growing numbers, the need for commercial landscaping will continue to increase, bolstering the already high valuations for companies in this subsector.
- Niche companies will become especially valuable as roll-ups continue. In their efforts to consolidate smaller companies into larger regional/national businesses, acquirers will be actively seeking out companies delivering specialized solutions to fill out the missing elements of their services. We expect companies in these niche sub-sectors to see higher EBITDA multiples offered over 2024.
- Heavy buyer competition will keep multiples high for now. Because strategics and PE firms alike have the same goal for these smaller companies, the competition for roll-ups will continue, driving EBITDA multiples for landscaping companies higher. We expect this competition will continue until interest rates decline sometime in 2024 and acquirers start seeing larger M&A transactions more attractively. Until then, smaller companies are in a great position to sell, assuming they have the right M&A advisor on their team.
|Related: See our article on the Top M&A Advisory Firms in the US|
Selling Your Landscaping Company
In my own experiences selling previous companies, one of the biggest challenges I faced was the total lack of transparency in M&A data to help me understand how acqurers were valuing my company. Since those experiences, it’s become a personal mission of mine to improve that transparency.
If you are looking for some advice from a fellow entrepreneur, I am happy to help. You can reach me at the link below or through the contact page of this website.
- Industry Reports
- Landscaping Services Market Insights, Fall 2023 (Hyde Park Capital)
- Landscaping M&A Transactions in Emerging Economies (SSRN)
- Facilities Services Market Update, Q2 2023 (Lincoln International)
- Sector Valuation Insight Report, April 2023 (Buzzacott)
- Examining the Mergers and Acquisitions Landscape in 2023 (Program Business)
- Lawn Care Mergers & Acquisitions: Current Developments (Principium Group)
- State of the Industry Report: Path to Success in 2023 (Landscape Management)
- Facility & Residential Service, Q3 2022 (Solomon Partners)
- Landscaping Update, Q3 2022 (Victory Partners)
- 2022 M&A Activity in Landscaping (Caber Hill Advisors)
- Landscape M&A Update, October 2021 (Principium Group)
- Commercial Services, 2021 Update (Stout Investment Banking)
- Inside the Green Industry (Greenwich Capital Group)
- Valuation Multiples for a Landscaping Company (Peak Business Valuation)
- How to Build a Million-Dollar Landscaping Business (Driven Landscapes)
- Valuing a Landscaping Company (Peak Business Valuation)
- A/E Business Valuation and M&A Transaction Study, 3rd Edition (Rusk O’Brien Gido & Partners, LLC)
- Inside Mergers & Acquisitions and What It Means for the Industry (The Edge)
- Pair of Top 100 Companies Expand Through M&A Action (Lawn & Landscape)