Leaf Home, a Gridiron Capital-backed provider of home products and services, should be positioned to re-launch an initial public offering process within the next six to 12 months, said CEO Jon Bostock.
The Hudson, Ohio-based company – which currently has more than USD 1.8bn in revenue – filed an S-1 with the SEC to go public in late 2021 and hired advisors and underwriters before the market turned and the process was pulled around April 2022, Bostock said.
Leaf Home used the opportunity to enhance internal processes and infrastructure, including the addition of several key hires with IPO experience and the current implementation of a new customer relationship management system, according to Bostock, who said the business “is now positioned even better” for the public markets.
The company is “very profitable, with free cash-flow” and more than 10% organic growth forecast for 2024, he noted.
Leaf Home is building to an anticipated IPO, though Bostock did not rule out a sale, noting “a tremendous amount of inbound interest”. The company has not mandated any advisors for a new process, he said.
Leaf Home’s portfolio includes gutter protection; low-entry walk-in tubs, tub-to-shower conversions, and stair lifts; salt- and chemical-free water treatment solutions for homes on hard, chlorinated municipal water; and interior and exterior home products including windows, doors and showers.
The company estimates that it is within a 90-minute drive of approximately 80% of US zip codes, Bostock said. More than 80% of its total material spend is on US or Canadian manufactured products and well over 90% of suppliers are based out of the US or Canada, he noted.
Bostock, who took the reins as the CEO this past March after a six-month stint as interim CEO, previously was an operating partner at Gridiron and COO of Big Ass Fans, the latter where he led a USD 500m private equity transaction with Lindsay Goldberg. Prior to that, he spent more than a decade with GE in various management roles.
In terms of comparable public companies, Bostock pointed to other companies that, like Leaf Home, “play a role in making home ownership easier,” such as Zillow [NASDAQ:ZG], Frontdoor [NASDAQ:FTDR], Leslie's [NASDAQ:LESL], Angi [NASDAQ:ANGI], Jeld-Wen [NYSE:JELD], Trex [NYSE:TREX] and Azek [NYSE:AZEK].
Leaf Home differentiates itself with its wide breadth of offerings, owner-operator model and tech-enabled services, Bostock said. He also noted the company’s proven growth of new products and services, with the company’s water solutions and home enhancement businesses growing 110% and 100% this past year, respectively. Earlier this year, Leaf Home launched its newest offering, a garage flooring product.
Leaf Home plays in a highly fragmented market consisting largely of single entities or regional operators, with big box retailers such as Home Depot [NYSE:HD] and Lowe's [NYSE:LOW] providing some degree of offerings nationwide, Bostock said. Other players include digital marketplaces such as Angi, Thumbtack and Neighborly, which rely on third-party service providers, he added.
Leaf Home offers its patented LeafFilter gutter protection system at hundreds of Lowe’s locations nationwide, Bostock noted.
There has been some consolidation in the space, with Bostock pointing to Gridiron’s January 2023 investment in Legacy Service Partners, a provider of residential heating, ventilation, and air-conditioning (HVAC); plumbing; and electrical services.
Founded in 2005, Leaf Home has 8,000 employees and independent contractors, including an installer network. It has more than 200 sales, installation and training locations throughout North America, and an additional corporate office in New York City.
Gridiron acquired a majority stake in Leaf Home in 2016 when it had USD 100m in revenue, according to Bostock. The company has since completed multiple acquisitions, largely for its home enhancements line of products, but is focused on organic growth at this time, he added.
Leaf Home uses Gregg Eisenberg of law firm Benesch. Its auditor is PwC.
