Co-owner, Keystone Pest Control
“PCO M&A Specialists really brought it together. I don’t think it would have worked with anybody else, to be honest.”
Keystone Pest Control
John Pirrone and Steve Dietrich
“Definitely consider your software and consult early with somebody like Dan (Gordon). Get PCO Bookkeepers involved early and have them do your books, accounting and taxes, and have them look at your software to see what can be made more attractive in the future so you’re in a good position when you’re ready to sell. It’s not something you want to do last minute.” —John Pirrone
Preparation meets opportunity for pest control company sold to Certus
Business partners John Pirrone and Steve Dietrich struck out on their own from a former employer to found Keystone Pest Control nearly 30 years ago. Over the years, they ran the business as hands-on owners, serving residential and commercial customers across five counties in the Bay Area.
The Decision to Sell
A couple years ago, Keystone’s owners decided it was time to think about selling their business. “We’re old,” John says, laughing. “It just seemed like the right time. Steve and I have been doing pest control for about 40 years. It was a decision we made together.”
At that time, they reached out to Dan Gordon, managing member of PCO M&A Specialists, a pest control industry-specific exit-planning firm that has negotiated dozens of sell-side transactions at some of the highest pest control industry valuations in history. John had read many articles Dan wrote for pest industry trade publications, and he appreciated his expertise.
“We started thinking about selling before the (COVID-19) pandemic, and when it hit Dan wisely advised us to wait,” John says. “In December, we reconnected with Dan and he said things are coming alive again, so it’s a good time to start looking around.”
While waiting for the right time to sell, Keystone became a client of Dan’s accounting firm, PCO Bookkeepers. Previously, a firm outside the pest control industry had been doing Keystone’s accounting and taxes.
“They were just crunching numbers,” John says. “They weren’t knowledgeable about pest control, and during the whole pandemic, they never contacted us once.”
Meanwhile, PCO Bookkeepers stepped in to help Keystone with the Paycheck Protection Program and began co-hosting timely webinars with digital marketing agency Coalmarch to help members of the pest control industry get through the early days of the pandemic.
“All these things were insightful for us to help get us through these really hard times,” John says. “It reinforced my belief that (Dan) and his team are involved and have a finger on the pulse of industry. No one else was doing that.”
Another thing unique to PCO Bookkeepers and PCO M&A Specialists is their deep knowledge about pest control industry software systems. Prior to the pandemic, Keystone had been operating on an old system. John suspected changing to a better program would help with the sale of the business. PCO Bookkeepers confirmed it was the right move and worked with Keystone’s office to help them convert to a new system.
“If we hadn’t done that, we wouldn’t have been nearly as attractive,” John says. “Dan guided us on which software to use and made it easier to transition.”
When it was time to sell, Keystone’s owners set their sights on finding the right buyer. In addition to the financial considerations, the most important factor for them was their employees.
“We’re a small, independent company, kind of like a family,” John says. “The money is one thing, but having your company possibly disintegrate after you leave was not what we were looking for.”
As luck would have it, Certus began looking in Keystone’s region right at the time John and Steve were ready to sell. They chose to sell to Certus, with the deal closing on June 1.
“(Certus is) concerned about building up the people aspect of the company, so that was a big win for us,” John says. “It was a good fit all the way around. Everything just clicked. We were lucky in many ways, and also there was preparation done, so it all came together.”
John credits Dan and his team for getting the ball rolling with Certus, having a good relationship with its COO Amy Wilson and being on top of every last detail.
“I don’t think it would have worked with anybody else, to be honest with you,” John says. “I have nothing but good things to say about Dan and his team. There are a lot of other brokers out there who do the M&A part of it, but not the accounting. It turned out to be really nice to work with someone who could do everything. They really brought it together.”