To the Point Home Services Podcast

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Episode 77: Part 2: The Dave Geiger Story to $500MM

July 13, 2021

Episode 77: Part 2: The Dave Geiger Story to $500MM

Part 2: The Dave Geiger Story to $500MM

Published: July 13, 2021


Recently on To The Point, Dave Geiger, Founder & CEO of Horizon Group Holdings joined to share his story of starting Horizon Services and the journey taking it from a $1mm company to $500mm and still growing. If you haven’t heard the first part of Dave’s story, be sure and check that out for some background! Now, Dave shares the impact that M&A had and continues to have in his success.

The first part of Dave’s story covered from the company’s founding in 1987 up until around the period of time in which they had sold. They purchased the company back in 2003, and by 2008, Horizon Services had a location in Delaware and was just opening up a Pennsylvania location. In order to get to this point, they had partnered with a consulting firm that had helped them with their marketing & branding campaign. Despite the recession, they had really doubled down on their marketing efforts and gone very heavy on TV, radio, and print. This propelled the brand, and they gained massive exposure past Philadelphia as far as New Jersey. There was so much demand that they simply had to explore that market as well, and by 2010, they had 3 locations opened up (with the 3rd in New Jersey). Replicating what they had learned, they implemented their processes in New Jersey and scaled the business further.

Even though the recession was a headwind, they doubled down in their marketing and grew through this entire period, growing to 50 million. They continued to grow, making the decision to open up in Baltimore as well. Horizon Services hired a team, put marketing out, and got equipment in the warehouse, but it was slow going. Dave’s team had to spend a lot of money, and it took 3 or 4 years to really take hold. It was a new market, and they didn’t have the immediate success that the other locations had enjoyed. While today the Baltimore location is a $35mm operation, Dave feels now that capital could have been used in better ways…which brings us to M&A.

Acquisition as a Growth Strategy

By 2014, Horizon Services had already done a few smaller acquisitions, but they had their sights set on something bigger. Dave and his team were looking to find something outside of their market to really dip their toes into M&A, and found a business in Connecticut at just about $8mm in revenue. The acquisition was successful, and Horizon Services shared their principles to help that business grow. The owner is still there today!

Dave had the M&A ball rolling, and the strategy for growth was really focused on acquisition. By this point, they were at $100mm, and wanted to keep going. They started to look for a partner that they could scale the business with; one that had the capital and desire to grow the business through acquisitions. They spent 2016 doing just that, interviewing a bunch of buyers to find a partner they felt aligned with their values and vision.

Partnering for Success

Dave and his team took their time finding the right partner, and decided to move forward with a PE firm called Sun Capital. They had the integrity, honesty, and alignment Horizon was looking for and also had the goals and plan necessary to grow. The plan in 2017 was acquisitions and organic growth, and they laid out the key drivers of the business to work on. There were a few major acquisitions right out of the gate, including Gold Medal in New Jersey. There was a 5-year plan in place for the investment, and they were able to achieve their goal in only 32 months. It was a very successful venture for both parties, and they rolled into the investment.

Horizon Services went to market again at the end of the 2nd quarter in 2019. They spoke with several PE firms, and decided to more forward with New Mountain Capital for similar reasons. Core values aligned, they had over 50,000 net job creations in their portfolio, and had a “buy and grow” strategy. New Mountain Capital helped Horizon Group Holdings round out their C-suite, and made sure the right team was in place to get to where they wanted to grow.

In 2017, 30 years after opening, Horizon Group Holdings was at $125mm. A few months later, they were at $280mm in revenue. Today, they are right on pace to hit $500mm with no signs of slowing down. Acquisitions have played an integral role in this growth, and if you aren’t at least aware of the potential that M&A has for your business, you’re doing yourself a disservice.

What is Your Business Really Worth?

The home services industry is in a great spot right now, and opportunities abound. Sure, there are debates about where multiples are heading, but these things tend to be cyclical. Dave recommends two critical things. Firstly, focus on your business. If you’re always honed in on making your business better every day, you’re always increasing your value. Secondly, even if you aren’t interested in selling, get to know the score!

Even as M&A has heated up over the past several years, there are still many misconceptions about selling. As an owner, you have more options than just selling and walking away. Really, Dave says, there are 3 different models to M&A. The retirement model, the transition model, and the partnership model. The retirement model is the one that some still have in their head as the only option: selling and walking away. You can also transition to a different role in the company, or do what Dave prefers, and become a partner. This means staying on in your role as the owner, continuing to run your business, but with the support of your partner to help grow your business to even greater heights.


So, what’s keeping many owners from getting to know the value of their business? There are many common fears such as not being a big enough company, or perhaps you feel like your organization is a bit of a mess. Maybe you aren’t currently profitable, and don’t want to hear that from someone else. One of the most common hesitations is not wanting to “work for someone else”. None of this should keep you from knowing the value of your business. You might be pleasantly surprised! If you’re just starting to warm up to the idea, Dave recommends considering what the ideal outcome would look like if you were to sell your business. What is success to you? Is it making more money? Is it growing through acquisitions? Perhaps you’re ready to cash in your chips and move on, and that’s fine, too.

On the Seller’s Side

Regardless of where you’re at, the first step has to be knowing where you are. Go out and get a valuation (or several!), and buyers will tell you exactly where you stand. This will give you a clear path to follow, as you’ll discover what you’re doing well, and what parts of your business you need to focus on. Even if you have no intentions of selling any time soon, this is a great way to see if you’re on track to your eventual goal. Remember, we’re all going to have to leave the business at some point or another–we won’t live forever! Whether you dream of retiring someday or simply want to pass on a great legacy to your children, you have to have an eventual goal at the end of the road. Otherwise, what are you working towards?

On the Buyer’s Side

It might help to understand the buyer’s side of things, too! What is your potential partner looking for? They are certainly going to want to know what your intentions are. Are you planning on staying onboard to run the company, or perhaps in another role? Or are you looking for a way out? Both options are perfectly fine, but if you are intent on leaving, the potential buyer is going to want to know if you have a management team in place that can hold things together during your departure. Horizon Group Holdings also asks potential sellers what they think is going well with the business, and what areas they feel they could use some help in. Your buyer may also want to get to know your market, and what your reputation is in your service area. Financials are also important, so if you have your numbers in order, that’s going to be a big help.

All of this information will be used to figure out how the business could be invested in to grow. It could be through another acquisition, more training, more technicians, or even more advertising. Really, your potential partner is going to be focused on how they can help grow your business. That’s some great help to have, especially if you want to stay onboard!

Financials and Add Backs

Many owners are great at running their business. They know their customers, they have poured into their employees, and they really have their processes nailed down. But the financials can often be a bit of a gray area. That’s why we hire an accountant, right? Don’t let your fear of not understanding all of the numbers hold you back.

Dave has found that many owners struggle to understand add backs. Basically, you’ll want to go through every line item and identify if an expense is recurring, or if it’s a one-time thing like a legal matter. Say you have a car that is being paid through the business and will be part of your business going forward—that’s an add back! Anything that adds value to the profits situation of the company (EBITDA) that the new buyer won’t have to pay for is an add back. It’s an owner’s expense that won’t be an expense on the behalf of a new buyer, and won’t be incurred again in the future. If post-acquisition expenses are going to show up on your income statement again, they are not  legitimate add backs.

Cost of Valuation

Worried that finding out how much your business is worth will cost you a fortune? The cost can vary depending on how deep into the process you go, but it’s really not as expensive as you think. If you have good accounting and your add backs are in order, you can sign an NDA, provide your financials, and get a pretty good benchmark for the price before getting to the LOI (letter of intent). Once you get to the LOI stage, that’s when things get a bit more expensive. You’ll have to invest in professionals, an accountant. Your potential buyer will take on some of this expense, typically, such as getting a Q of E (quality of earnings) report.

Really, finding out how much your business is worth doesn’t cost a lot of money—just a little bit of time finding an offer!

Ask Around!

Want to know more about a potential buyer? You can always reach out to other companies that have partnered or sold with your interested buyer. In fact, Dave recommends it. Ask them questions like what they thought the process was going to versus what it actually was. Find out what they wished they had known or done differently. You can get a firsthand look at how they are being treated now, how things were handled throughout the process, and take that all into account in making your own decisions.

M&A Isn’t Going Anywhere

Through M&A, Dave has seen incredible growth for his company and made a lot of impact in the industry. He is humbled and proud of being able to create lots of opportunities for people, and M&A is a big part of his journey. If you’re an owner, you may not be ready to sell your business, and that’s perfectly fine. You might also feel pressured right now, hearing that you have to sell now because of the pending capital gains tax, or that multiples are going to go down in the future. The reality is, M&A isn’t going anywhere. Multiples might go up, or they might go down. Dave recommends that instead of worrying about all of that, simply focus on your business. You can outpace multiples just by having steady, consistent growth in your business. Focus on satisfying your clients and your team, and that will lead to profitability. Lastly, be sure you know  where you stand. What is your end goal? What would success look like to you, and what is your business worth today? These things will give you clarity as to where you are, and what it will take to realize your version of success.

Quoting Jim Abrams, “this business is simple, it’s not easy”. If you believe in yourself and what you can do, you’ll grow. Dave reminds us that if you focus on doing the right things day in and day out, believe in yourself and what you can do, and want to grow—you will! Remember, you’re not alone. There are plenty of great people in this industry like Dave that love to help others, and had help getting to where they are today. Dave highly recommends joining a peer group, and has been a member of Nexstar since 1996. He’s on the board now, and loves the culture and what they’re all about. But getting in front of other owners to find out what they’re doing and what’s working for them, including M&A, is a great way to accelerate your growth.

To get in touch with Dave, you can reach him via email at [email protected].

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