KKR to buy Brickman Group for $1.6bn

January 2014 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

Private equity firm Kohlberg Kravis Roberts (KKR) announced in November that it had agreed to purchase Brickman Group, one of the largest commercial landscaping companies in the US, for $1.6bn.

Brickman had been attracting a great deal of interest from a number of PE firms in the latter months of 2013. Blackstone Group and TPG Capital expressed interest in purchasing the company from fellow PE firm Leonard Green & Partners LP. However it was KKR who won the race for Brickman. Speaking in a statement announcing the deal Andrew Kerin, chief executive of Brickman, said “We are very pleased to partner with KKR, a leading investment firm with extensive experience in service businesses and an outstanding track record. With our partner, we are well positioned to accelerate our growth, further enhance the quality of services we provide to our clients and extend our industry leadership.”

The acquisition of Gaithersburg, Maryland based Brickman will come from KKR’s eleventh North American fund, and other funds and accounts managed by the firm. The North American fund has been particularly busy of late, acquiring other businesses including PRA International, a provider of laboratory testing services for drug manufacturers; software developer Mitchell International; and the Crosby Group, a lifting equipment company. In expanding its portfolio, KKR has made its presence felt across 25 different US industries. The firm’s investments have covered a number of diffuse sectors ranging from software to healthcare to construction. Simon Brown of KKR said “Brickman is a leader in its industry, with an outstanding management team, a distinguished culture, talented and committed employees, and a track record of delivering high-quality services to its clients. We are excited to invest in the company and look forward to working closely with the Brickman leadership team to continue to build on the company’s market-leading position and grow the business over time.”

The sale of Brickman to KKR represents a solid return for Leonard Green & Partners. The firm originally acquired Brickman in 2007 from another PE firm, CIVC Partners LP, for $847m. Under the terms of the sale to Leonard Green, members of the Brickman family and the company’s management retained equity interests. Leonard Green committed $222m of equity to the deal, according to a November 2006 regulatory filing. Scott Brickman, whose grandfather founded the eponymous company, stepped down as chief executive in 2012 after 14 years to become its chairman. He succeeded his father Dick, who has become Brickman’s chairman emeritus.

KKR’s acquisition of Brickman was the second such purchase of a landscaping unit by a PE firm in two months. In October, Clayton Dubilier & Rice LLC agreed a deal to acquire a majority interest in the landscaping unit of Deere & Co in a deal valued at $46m.

Credit Suisse Group AG advised KKR on the acquisition. Simpson Thacher & Bartlett LLP also provided the firm with legal advice. Brickman received advice from Barclays Plc, Morgan Stanley, Latham & Watkins LLP and Dechert LLP.

Brickman, founded in 1939, employs nearly 10,000 people across the US and has a client base of around 10,000. The company provides a number of services including landscape maintenance and enhancement, water management and tree care. Brickman also tends to the gardens of offices, campuses, hotels, shopping centres, healthcare facilities, industrial parks and homes, and removes snow and maintains sports turf. Currently, Brickman Group has more than 160 branches across 29 states.

Richard Summerfield