BrightView [NYSE:BV], a Blue Bell, Pennsylvania-based commercial landscaping services company, has a robust acquisition pipeline and the financial ability to act, according to company executives.
During his prepared remarks on its 1Q23 earnings conference call held 7 February, President and CEO Andrew Masterman said BrightView was reviewing “more than USD 700m of opportunity,” to expand and deliver strong free cash flow.
The focus is businesses that add significant shareholder value at attractive prices, the CEO said. He cited as examples the recent purchases of Island Plant Company (IPC) and Smith’s Tree Care (STC).
M&A will help the company increase its density and leadership within existing markets, and grab market share in new locations, the CEO said. Deals will also boost its landscape enhancement services portfolio and improve its technical capabilities in specialized services, said Masterman.
Executive Vice President and CFO Brett Urban added that BrightView’s robust cash generation provides it with flexibility to execute its M&A strategy.
During the Q&A session, Robert W. Baird & Co. Vice President and Senior Research Associate Justin Hauke asked about the revenue percentage being driven by acquisitions. CFO Urban said BrightView was looking at approximately 2% growth during the current financial period, having exceeded its earlier guidance level of 3% in previous years.
For 1Q23, covering the three-month period ended December 2022, BrightView recorded total revenue of USD 655.9m, a 10.8% increase from a year earlier. Adjusted EBITDA rose 14.1% to USD 48.6m, while cash and cash equivalents amounted to USD 22.4m.
An excerpt from its 1Q23 earnings release, citing Masterman, said it had a “strong first quarter, underpinned by robust organic revenue growth across both segments, acquisition benefits, disciplined cost management and a steadfast focus on executing our growth strategy.”
Its two operating segments are Maintenance Services, comprising Landscape Maintenance and Snow Removal; and Development Services.
For the year ended September 2022, BrightView reported full year total revenue of USD 2.77bn, an 8.7% increase from the USD 2.55bn recorded a year earlier. However, adjusted EBITDA declined 4.8% to USD 287.9m.
On 31 January 2023, BrightView announced it had acquired IPC, a Pukalani, Hawaii-based premiere resort and condominium landscaping company. Earlier that month, BrightView said it had purchased STC, a Newport News, Virginia-based tree care service provider.
BrightView has a market cap of USD 610m.
