The strong residential focus of Conserva Irrigation, Outdoor Lighting Perspectives and Archadeck was a key reason behind Lynx Franchising’s acquisition of Outdoor Living Brands. “This was a very strategic, transformational stake in the ground” for Lynx and its private equity owner, MidOcean Partners, said Lynx CEO Russ Reynolds of the entry into outdoor home services. “There’s tremendous overlap between commercial services and home services,” he continued, with the goal for Lynx being to “create a best-of album” of brands.
With the acquisition, completed September 9 and announced this week, Outdoor Living Brands joins a Lynx portfolio of $700 million in revenue across three brands: 9,000-plus-unit commercial cleaning franchise Jan-Pro, fabric, textile and electronics restorer FRSTeam, and Intelligent Office, a temporary and virtual office space franchise. With its concepts, OLB adds more than 250 locations and $123.5 million in sales to the Lynx portfolio. Terms of the deal were not disclosed.
Chris Grandpre, who founded Outdoor Living Brands in 2008 and who as part of the sale will leave his CEO role to join the Lynx board of directors, said “a lot of inbound interest” in the company prompted OLB to engage investment bank Boxwood Partners this summer to explore a potential sale. Once formally introduced to Lynx, “we worked very hard over a 30-day period to make it happen,” he said.
“We found alignment with strategy in their diversification efforts and, more importantly, with culture,” said Grandpre, particularly in “training, franchisee support and driving unit economics.”
“Credit to Chris and the leadership team. These kinds of things don’t come together in this time frame” very often, said Reynolds as he noted Outdoor Living Brands was “highly organized.”
“Usually the sellers have to kind of play catch up, but that wasn’t the case,” he continued.
Scott Zide, president and COO of Outdoor Living Brands, will continue to lead the brands, working with the Lynx executive team. OLB will eventually serve as the residential platform for Lynx, which will “selectively and surgically” acquire more brands or even incubate founder-led concepts, said Reynolds.
But, said Reynolds, “job No. 1” is to support OLB’s existing franchisees, who are growing quickly and coming off a strong 2020 in which demand for residential improvement services surged as consumers spent more time at home during the pandemic.
“We’re mindful of the COVID bump,” said Reynolds when asked how Lynx evaluated the performance of Outdoor Living Brands’ concepts within the context of COVID-19 spending shifts.
“We’re experienced and watchful in how we think about the COVID bump,” he continued, noting Jan-Pro, with its cleaning and disinfecting services, saw considerable sales growth in 2020 and “we saw people jumping in left, right and center into the disinfecting business.”
As reported in Item 19 of its franchise disclosure document, Conserva Irrigation franchisees, who provide repair, maintenance, service, design and construction of irrigation systems, increased gross revenue by 33.2 percent in 2020, to $704,514, for those operating for at least two years. (Eleven of the 15 reporting franchisees operate multiple territories). Average gross sales for Archadeck franchisees were $1.68 million in 2020, with system sales up 35.7 percent, to $74.3 million, according to the brand’s FDD. Average sales of 39 single-territory Outdoor Lighting Perspectives franchisees were $568,806 in 2020.
Lynx Franchising, said Reynolds, was attracted to the “embedded recurring revenue within the portfolio.” Take Conserva Irrigation, for example, he said. “Someone running over a sprinkler head in the morning” and needing a repair “isn’t going to change because of COVID.”
He and Grandpre also pointed to a shift in consumer spending on the home that began before the pandemic, as Grandpre said the trend toward remote work and growth in the suburban housing market will only continue. “The heart and soul of our business is the suburban, two-income home,” said Grandpre. He also pointed to investments made by Outdoor Living Brands before the pandemic that have contributed to sales growth.
Among those investments was creation of a Quick Start program to guide franchisees “from the moment they sign” their franchise agreement, said Grandpre. It includes both software and staffing support “to shorten the path to breakeven and shorten the path to hitting our AUVs.”
MidOcean Partners, added Reynolds, is also prepared to make investments in training and in franchise development to grow the systems.
New York-based MidOcean Partners, which among its investments owns FullSpeed Automotive, parent company of oil change franchises Grease Monkey and SpeeDee, acquired Lynx Franchising in January 2021 from Incline Equity Partners, which held Lynx since October 2016.
Based in Alpharetta, Georgia, and formerly Premium Franchise Brands, Lynx changed its name in 2019 following its acquisition of Intelligent Office. It then bought FRSTeam in June 2020. Earlier in September it acquired The Content Specialists, a hard contents restoration company, with plans to merge it with FRSTeam.