The home services sector is well positioned for growth thanks to several long-term tailwinds, such as a shift to suburbs and single-family homes, increasing millennial homeownership, expanding do-it-for-me interest, and an aging population.

Within this appealing space, outdoor living trends are attracting investors to businesses that repair, maintain, and enhance the home's exterior. This includes services like lawn care, pest control, gutter cleaning, pool care, and landscape remodeling, as well as a wide range of outdoor living products.

In this article, our Consumer Group and Industrials Group share what's driving consumer spending on exterior home businesses and outdoor living, how recent Harris Williams client Virginia Green became a leader in the lawn treatment space, and guidance for investors looking to tap into the category’s growth.

Enhancing Curb Appeal and Outdoor Functionality

Whether they’re maintaining their home’s exterior or enhancing their outdoor living spaces, consumers are investing in the outsides of their homes across a variety of services and products.  

In fact, several statistics point to persistent momentum in outdoor living. The yard is currently ranked as the most popular area among architects, while the outdoor living category has experienced 102% growth from 2015 to 2022.^{1, 2} Meanwhile, 82% of people say their outdoor space is more important than ever, and 38% of home improvement spending is focused on the property’s exterior.^{3, 4}

“People are spending more time in their outdoor spaces and understand the value in maintaining and improving them,” says Brent Spiller, a Consumer Group managing director. “This rising emphasis on outdoor living is having a positive impact on the exterior home services and products market.”

At the same time, challenging real estate and mortgage rate dynamics have led many consumers to be rate-locked into their homes. “Rather than moving into bigger homes, homeowners are choosing to invest in their current properties,” explains Zach Ledwith, a director in our Consumer Group. “The yard is often a cost-effective place for consumers to make a highly visible impact on their home’s appeal, appearance, and livability.”

These themes will drive greater consumer demand for a range of outdoor home companies. “Investor interest in outdoor living categories is increasing with plenty of ways to play the sector,” notes Tim Webb, a managing director in our Industrials Group. “Companies up and down the exterior home value chain—from service providers to suppliers and manufacturers across lawn solutions such as natural and artificial grass, landscape products like stone and pavers, and outdoor furniture—will all continue to benefit.”

Virginia Green: A Lawn Solutions Leader

Virginia Green is a premier provider of residential lawn treatment services with a rapidly growing footprint. The business offers personalized solutions through a flexible subscription-based model, underscored by its strong brand reputation.

The company’s suite of recurring and high-margin lawn care plans is key to its investor appeal. “Virginia Green’s subscription-based solutions are low cost and high impact,” explains Spiller. “The impressive retention rate of its services generates healthy organic growth regardless of underlying economic conditions.”

Other unique elements of Virginia Green are its customer value proposition and operational excellence. By consistently delivering top-quality services and a best-in-class customer experience, Virginia Green has established strong relationships and awareness within its communities. This helps drive continuous demand from both new and existing customers throughout its footprint.

In addition, the business excels at maximizing efficiency and profitability. “Through its route density and team of experienced professionals, Virginia Green has built leading productivity statistics per truck,” says Ledwith. “Its ability to solve more customer challenges with a breadth of value-added services also contributes to high annual customer lifetime value."

Finally, the company is effective at creating growth via M&A, which is an important differentiator in the home services market. “The sector is highly fragmented, with opportunities for platforms of scale to bring sophistication and professionalization to their acquisitions,” says Spiller. “Virginia Green is a leader in this area, executing its proven M&A playbook to expand its service offering and geographic reach.”

Capitalizing on Green Space

Powerful outdoor living trends are propelling steady consumer investment in their yard spaces. Businesses that serve the outdoor home market will continue to capitalize on these dynamics and offer substantial growth opportunities.

“M&A activity is accelerating throughout this sector as investors seek direct and indirect beneficiaries of these themes to invest behind,” says Spiller.

“With so many different outdoor home services available, we also expect consolidation across service verticals,” adds Ledwith. “A significant opportunity exists for platforms to become a one-stop shop for all a homeowner’s exterior needs.”

To discuss the M&A potential in the outdoor home market, please contact our senior professionals.

1. AIA Survey

2. Joint Center for Housing Studies of Harvard University

3. Forbes

4. Harvard University