BrightView Holdings (BV)
A first look into a landscaping services play
Disclosure: None
Note: This first look is not intended to be exhaustive. This is my first time looking at the company. This post is intended to share my findings, both positive and negative. The overarching goal is to learn about a new company and put it on both our radar screens.
Overview
BrightView is the largest provider of commercial landscaping services in the United States. Such language evokes a behemoth, but BV is a relatively small company in absolute terms.
For its fiscal year ended September 30, 2025, the company reported revenue of $2.7 billion. Its market cap is just $1.25 billion.
BV operates in an extremely fragmented industry. Its “largest provider” status was achieved with a 1.7% market share of a $113 billion commercial market that includes landscape maintenance ($88 billion) and snow removal ($25 billion). This is to say nothing of the residential market.
The company operates in two segments: maintenance services and development services, as detailed in this snapshot from the 2024 annual report:
Focusing on the commercial segment allows BV to leverage its sales force to acquire larger customers (lower CAC) and develop recurring revenue.
The company is executing a fairly standard consolidation playbook of centralizing certain functions and standardizing equipment across the enterprise.
As seen below, its footprint remains sparse, highlighting an opportunity for future expansion and consolidation.
Northern markets are classified as seasonal markets that typically include snow removal, while southern markets are “evergreen” requiring landscape maintenance all year.
Branch Model
BV’s branch model delivers services to corporate and commercial customers, HOAs, public parks, hotels and resorts, hospitals, educational institutions, retail establishments, golf courses, and more, through its 280 branch network.
The company boasts 11,700 office parks and corporate campuses, 10,000 residential communities, and 700 educational institutions, and serves as the "Official Field Consultant” for Major League Baseball (whatever that means).
Branches serve both maintenance and development customers. Each branch services between 25 to 100 customers across 50 to 250 sites and generates between $2 and $22 million of annual revenue.
Here’s 2024 maintenance services broken down into end market:
The company’s development services segment is more project-based. Projects can range from $100,000 up to $10 million, with an average size (2024) of $1.3 million. BrightView may be hired by a general contractor on larger jobs, and on these and other projects, it manages downstream services providers such as fencing installation.
A Short History of BrightView
2013; Affiliates of KKR acquire Brickman Holding Group, an entity with roots dating to 1939.
2014: Acquisition of ValleyCrest (founded in 1949), which doubled the size of the company. Changed its name to BrightView.
2018: July initial public offering.
2023:
August: $500 million preferred equity investment by One Rock Capital Partners to support deleveraging and expansion.
October: Dale Asplund becomes president and CEO (Oct. 1).
November: The company launches One BrightView to transform the business.
2024: Divested its US Lawns subsidiary for $51 million cash
2025: Board initiates $100 million share repurchase program
As of September 2024, the company had 19,100 employees with 15,750 in maintenance services, 2,950 in development, and 400 corporate.
Management / Ownership
CEO and President, Dale Asplund has been in his role since October 2023. He served as COO of United Rentals since 2019 and was with that company since 1998. In 2024, Asplund earned a base salary of $950,000 and a bonus of $1.235 million. He was granted $4 million worth of RSUs and PRSUs in November 2024.
Chairman of the Board is Paul Raether, a senior partner at KKR.
Directors earn about $100,000 in cash compensation plus $120,000 in stock awards.
Ownership is as follows:
Investment funds affiliated with KKR: 22.1%
Investment funds affiliated with One Rock: 36.2%
Directors and officers: 2.2%
The Series A Preferred Stock held by One Rock is convertible into common shares at a rate of 105.9 common per preferred share at a price of $9.44.
Financial Analysis
Note: September 30 Fiscal Year End
Right from the start, we have a dilemma of sorts. BrightView has grown through acquisition and has a huge amount of goodwill and intangibles on the books. At the end of FY 2025, goodwill was over $2 billion, and intangibles amounted to $66 million.
This dynamic is the result of a highly acquisitive company paying a premium for good properties. This is how I square that circle…
Tangible capital tells us the quality of the underlying business. In this case, it appears the operating assets BV is working with produce solid returns in the low-to-mid 20s.
Including goodwill gives us the capital allocator score. In this case, in the mid-single digits.
In short, management found good assets but paid a premium for them. That lawnmower mows the same amount of lawn whether you paid book value or 2x book value for it.
Strategy plays a big part in my thinking on this front. If the playbook is to continue to acquire assets at a premium, well, I’m probably out at this point. That’s real cash going out the door.
But (and this appears to be the case here) if you slow/stop acquiring and either harvest cash and/or grow organically, the total capital employed figure begins to approach the tangible figure as high incremental returns are achieved.
Take a look at BV’s capital spending. From 2020 to 2024, the company shrank its investment in PP&E as acquisitions brought assets onto the balance sheet. (Note the similarities to Heartland.) Then, in FY 2025, the company ramped up organic spending, primarily on operating equipment and vehicles.
Capital structure is important, and BrightView has a few things going on here. For starters, it has and continues to carry a fair amount of debt.
In August 2023, One Rock Capital injected $495 million via a Series A Convertible Preferred issue, with 90% of the proceeds used to repay debt.
Of importance, BrightView maintains a $325 million receivables financing facility. In FY 2025, it borrowed $14.5 million and repaid $29.1 million. The FYE 2025 balance of $61.6 million is included in long-term debt.
Valuation
In my view, BrightView’s acquisition strategy determines if valuing it even makes sense. If it’s going to continue buying assets at a premium that results in a mid-single digit return, then that’s the return shareholders can expect.
However, if it begins to reinvest capital organically at the same return as the existing underlying return, then the upward drift could make the investment attractive.
Here’s how that looks graphically, with the numerical backup below.
Let’s assume management isn’t going to resume expensive acquisitions. Let’s also assume that FY 2025 EBIT of $164 million is a good estimate of current earning power. This considers recent margin expansion but doesn’t give credit for any future gains in efficiencies, but we have to draw the line somewhere.
With EBIT at $164 million and assuming a tax rate of 25%, earnings (NOPAT) would be $123 million. At a straight 10% discount rate, that’s worth $1.23 billion.
What about growth? Let’s use round numbers and assume the underlying return on capital is 25%. To grow at 5% would require $37 million ($746 million tangible capital x 5%), leaving $123 million - $37 million = $86 million distributable cash flow. At 5% (10% - 5% growth) that’s worth $1.72 billion.
Ok, so much for the value part, what about the price?
At $13/share as of this writing and 94.8 million shares outstanding, the common equity has a market value of $1,232 million. Then there’s $500 million in preferred plus about $800 million in net debt.
$1,232 million common equity market value
$500 million preferred
$800 million debt
$2,532 million enterprise value
Deconstructing the value equation above, the $2.5 billion enterprise value implies that the company would need to grow at 7% organically forever. Again, margin improvement directly impacts the bottom line, so your assumptions in this area matter.
Reality, of course, will be different. The company may pay down debt (increasing equity value), and/or it might make some acquisitions. And it may find operating efficiencies that accrue to the bottom line.
Note that management considers shares undervalued at current levels. The company spent about $25 million on buybacks in FY 2025.
Conclusion
To wrap this up, I’m intrigued. Here’s the market leader with less than a 2% market share in a fragmented industry. Underlying returns on tangible capital appear very attractive. But the company’s history of acquisitions, while perhaps justified to provide scale, could mute returns to shareholders.
There’s also the fact that KKR and One Rock control the business, a fact that should be weighed carefully.
BrightView is a pass for me right now, but I intend to check in from time to time to see how the story develops.
If you’ve made it this far, I’d be very grateful to you for your feedback on this post. It’s just two questions and will go a long way toward helping me improve Watchlist Investing. Thank you!
Stay Rational!
Adam
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