Pest Management Professional, September 2012

Sponsored by Mastering the Art of the Deal Merger expert Norm Cooper shares nuggets of wisdom on successfully selling and merging a pest management business Interviewed by Dan Jacobs Contributor I ts a simple plan Start a pest management business build it to a healthy size and eventually retire on the proceeds realized from selling the operation to a larger entity looking to move into your market Theres only one problem reality doesnt always work out the way business owners plan Norm Cooper a PMP Hall of Famer and past president of the National Pest Control Association now named the National Pest Management Association NPMA has represented sellers and buyers in deals where the acquired companies had annual sales of 300000 to more than 10 million and were located across the country from New England to California Purchasers have included the three largest pest management companies Terminix Orkin and JC Ehrlich now a part of Rentokil and investor groups and medium and small pest management firms In other words Cooper knows a little something about the reality of the merger business Norm Cooper 914 310 8857 President of Rye N Y based Norman Cooper Associates 914 310 8857 norman@ normancooperassociates com a merger and acquisition consultancy Cooper has helped orchestrate more than 50 pest management mergers Pest Management Professional PMP interviewed Cooper to gain insight on Mastering the Art of the Deal how buyers and sellers and their employees and customers can walk down the aisle hand in hand and live happily ever after Pest Management Professional PMP Mr Merger can you please share a few general tips on successfully selling a pest management business Norm Cooper NC Start preparing your company for sale today so that in the event of an emergency professional and or personal issues do not force a fire sale Just as you would clean and touch up a car or home to make it more sellable you should ready your business to be presented in the best possible light Specifically build business value by focusing on recurring accounts profitability revenue growth pricing margins and minimizing long term obligations PMP What are a few of the general terms and intricacies usually involved in a deal NC Terms confidentiality agreement letter of intent and due diligence the buyers accountants verify the financial statements and financial health of the business Lawyers should verify employment and that customer contracts are in order and that there are no lawsuits or liabilities pending An Asset Purchase Agreement should clarify earn out terms employment agreements and non compete clauses when applicable Buyers and sellers should familiarize themselves with contingencies tax consequences percent of allocation of purchase price toward good will depreciable assets non compete and employment agreements down payment and guaranteed payments vs contingent payments based on revenue and or profits Continued on page M8 www mypmp net Pest Management Professional September 2012 M5