These two shareholders were the primary owners of BrightView before BrightView sold its stock to the public. After the purchase, BrightView’s two largest shareholders, Kohlberg Kravis Roberts & Co (KKR) and MSD Partners will own 57 percent of BrightView, valued at more than $700 million. It funded the purchase from its cash balance and borrowings under the company’s credit facility. Management implied that other buyers are paying higher multiples to attract buyers.īrightView recently repurchased half of MSD Partners’ BrightView stock for $82.5 million. According to management, BrightView is acquiring companies at prices of 5x to 7x EBITDA (earnings before interest, taxes, depreciation and amortization). That timidity was gone in this quarter’s earnings call.īrightView has an acquisition pipeline with the potential of $600 million in annual revenue. While discussing the financial results through June 30, 2021, I described BrightView’s discussion of price increases as timid. In its new proposals, BrightView has not seen a reduction in demand based on increasing prices to reflect higher labor costs. Management stated that while labor costs have increased about 4 percent in each of the last few years, they expect increases of at least 5 percent in the next 12 months. The company has raised prices on ancillary services and has not seen a negative impact on revenue. enhancements, irrigation) have returned to pre-covid level across all segments of the business. Management stated that ancillary services (e.g. Increasing vendor collaboration to anticipate materials cost trends.Shifting from a just-in-time buyer to an advanced purchaser of materials with a plan to purchase materials within 15 days of contract award.Including price escalation language in bids.Shortening the expiration date for bid prices to 15 days.BrightView has taken the following step to mitigate the impact of future inflation: BrightView’s management has spent a lot of time discussing and planning ESG initiatives while business owners in markets that compete with BrightView will have to decide whether ESG initiatives are valued by customers.īecause BrightView bids on large landscape construction projects well in advance of performing the work, the recent inflationary trends in labor and materials have negatively impacted BrightView’s construction profitability. 31, 2021.īrightView has set a goal of being carbon neutral by 2035. BrightView management spoke about the company’s ESG (environmental stewardship, social responsibility and corporate governance) initiatives during a presentation to Wall Street analysts and investors related to the financial results for the quarter ended Dec.
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