How did Empower fund the acquisition of Wallaby Windows and Koala Insulation by Canopy Lawn Care?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
7 – BUSINESS ACQUISITIONS (Continued)
Wallaby Windows and Koala Insulation
On April 13, 2023, the Company acquired the assets of Wallaby, Wallaby-Melbourne, and Koala (collectively referred to as "Wallaby and Koala") for the purpose of adding window, door, and insulation brands to the existing portfolio.
After net working capital adjustments, the purchase price of Wallaby and Koala was approximately $93,203,000 which includes a $233,000 earnout provision subject to Wallaby and Koala maintaining certain system wide revenue thresholds and other metrics. The acquisition was funded by capital contributions from Empower consisting of units of ownership interest in BCAT valued at approximately $55,000,
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 55)
What This Means (2025 FDD)
According to the 2025 FDD, the acquisition of Wallaby Windows and Koala Insulation was completed on April 13, 2023, by Canopy Lawn Care's parent company, Empower. The total purchase price for Wallaby and Koala was approximately $93,203,000, which includes a potential earnout provision of $233,000. This earnout is contingent upon Wallaby and Koala achieving specific system-wide revenue thresholds and meeting other performance metrics.
Empower financed this acquisition through a combination of methods. Approximately $55,000,000 came from capital contributions from Empower itself, specifically through units of ownership interest in BCAT (MidOcean BCAT Holdings, Inc.). Additionally, Empower secured debt financing of approximately $24,500,000 to support the acquisition. The remaining portion of the purchase price was covered by cash on hand.
For a prospective Canopy Lawn Care franchisee, this information provides insight into the financial strategies and resources of the parent company, Empower. The use of a combination of equity, debt, and cash to fund acquisitions suggests a diversified financial approach. The inclusion of an earnout provision indicates a performance-based component in the acquisition agreement, aligning the interests of the acquired companies with the overall goals of Empower. This also highlights the potential for future financial obligations based on the performance of Wallaby and Koala.