[SITE] SiteOne Landscape Supply

SiteOne sources 135k landscaping SKUs from 5k suppliers and distributes to 280k customers, most of them private contractors operating in a single market. It is in the early innings of rolling up a fragmented $23bn industry, its share 5x that of the next largest player but still just a 15% of the overall market, which consists of more than 1k mostly mom-and-pop distributors. The company was birthed through the merger of McGinnis Farms and Century Rain Aid inside of John Deere, who thought that selling nursery, landscaping, and irrigation products to commercial landscapers would also help them sell more tractors and mowers. On the whole these deals, paired with disciplined execution, have created significant value – since 2016, SiteOne has grown EBITA by $327mn on $1.2bn of incremental capital. They’ve sustained these returns by differentiating on service and selection for large and mid-sized contractors, among whom SiteOne commands ~25% market share compared to just ~6%-8% share of smaller landscapers. The re-christened John Deere Landscapes expanded its store and product footprint through the acquisitions of United Green Mark (irrigation, nursery, outdoor lighting) in 2005 and LESCO (private label agronomics brand) in 2007…just in time for the Great Recession. With the economy ailing, revenue synergies failing to materialize, and dealers upset over channel conflicts, in 2013 Deere sold 60% of the business to Clayton, Dubilier & Rice, who hired Doug Black as CEO.