In 1964, Francis Kreer, a kitchen cabinet maker in Elkton, Md., was looking for ways to diversify his business offerings in hopes of earning more money for his family. He landed on pest control, and founded what would become Advanced Pest Management (APM), the highly regarded East Coast pest control firm.
“He grossed roughly $16,000 the first year with three employees — two of whom were my father, Phil Kreer and my aunt, Kathleen Keithley,” said Jeremy Kreer, who is now a third-generation owner of the business, alongside his brother Nam Kreer.
He said his father purchased the business in 1972, when he saw an opportunity to grow through franchising. He soon realized that APM’s real growth opportunity was through purchasing smaller companies, which set the stage for the micro-mergers that grew the company to what it is today. And Kreer was able to watch it all happen, first hand.
“I started at age 14, helping out and in the office, and then with termites and bat jobs,” said Kreer. “I ended up working my way up through the various positions until in 2001, when I took over as acting president.”
And after building the company, the Kreer brothers purchased it in 2003. Today it has grown from that three-person, $16,000-a-year company to six locations that will earn close to $7 million in 2017.
APM offers customers in Delaware, Maryland, New Jersey, Pennsylvania and Virginia a variety of services including residential and commercial pest control, termite control, rain gutter protection and cleaning, real estate pest inspections, beg bug treatments, wildlife control, energy conservation, insulation services, crawlspace encapsulation and moisture control.
ALL IN THE FAMILY
What hasn’t changed since 1964 is APM’s focus on family. Kreer said that being a family business allows for some unique opportunities, as well as its own set of challenges.
“Easily the biggest benefit is the extra freedom to try and fail. Being family, we’ve been afforded that luxury, right or wrong,” he said. “At the same time when there’s a disagreement about major decisions or direction, that’s tough. In hindsight, we could have and should have been more concrete with roles and responsibilities, especially in times of these disagreements.”
APM’S EXTENDED FAMILY
Although they contend with this dynamic, the feeling of family seems to extend past blood relatives to all APM employees. Kreer credits his entire APM team, first and foremost, for the company’s recent growth. Since they are exceptional, he said that he strives to create and maintain a fun and empowering environment. One example is Pancakes with Pappas, in which sales manager Jim Pappas makes breakfast as a reward for exemplary sales performance. Others include cash rewards for leads; empowering different team members to run different parts of staff meetings; and a win-win booklet that enables anyone to help create a win-win situation between APM and a customer where it may not currently exist. The goal is to reward staff for their successes and give them opportunities to feel like they contributed to “wins.”
But it doesn’t stop there. “We just had a BBQ paid for by APM for each location for a record month we had in May. We have had many SWARMs [an annual gathering around Christmas to recognize and smell the roses from the year],” said Kreer. “There is always some type of contest, with measurements of that contest, where we get to reward people in person.”
THE ART OF THE MICRO-MERGER
What about the other key factor in APM’s recent growth? Micro-mergers are a big part of APM’s current growth strategy, and have been since Phil Kreer moved away from the idea of franchising in the 1970s.
In 1976, the elder Kreer began purchasing local pest control companies that shared APM’s policy of putting the customer first, starting with APM’s first micro-merger, Ajax Termite and Pest Control.
Since the company has been in existence, management has completed between two and three dozen micro-mergers of small, one- or two-person operations. “It’s been a great way to improve our density in and around our operating communities,” Kreer said.
For Kreer and his team, each micro-merger begins with an evaluation of the fit of the potential acquisition.
“That is where we measure their programs with ours — the coverage area, the pricing,” he said. “It’s helpful in these instances where we actually know the business owner in a friendly way, having worked with them in or around our operating areas. Many times, we can offer new programs to companies that only cover termite or pest control, such as gutter protection, crawl correctives or insulation.”
He added that people are an important consideration when it comes to finding new members for the APM family. And of course, he said that before committing to any micro-merger, he and his staff do their due diligence when it comes to evaluating the numbers and assessing the financing.
Once the mergers go through, however, there is a great ROI. “There are not many large companies interested in pest businesses doing less than $500,000,” said Kreer. “That’s what I’m told by the people looking to us to buy them out.”
In addition to being a big fish in a small pond of interested buyers, Kreer added that there are several benefits to acquiring these smaller companies. For example, they might be more comfortable taking payments over time. APM also likes that they often acquire highly talented individuals with fresh ideas. They also have the option to create a new location to expand reach or fill in sparse routes. And don't forget cash flow.
But nothing great comes without challenges.
“There is always a people element you can’t plan for, so sometimes you have defectors or even old dogs trying to stand in their way,” Kreer said. “Major differences in prices and programs sometimes takes time and finesse — you have to leave things alone, even though you want to upgrade sooner.”
Although the challenges are clear, the benefits are worth it, and APM has another acquisition on the horizon. He’s not naming names, but Kreer is willing to share a little bit about the company in question.
“It’s someone that will solidify our footprint right in the middle of our core operating area, and we’ve had a solid friendly competitor relationship with for decades,” he said. “They even gave us wildlife leads.”
Although the latest micro-merger project isn’t public yet, Kreer can talk about APM’s recent purchase of Turner’s Pest Control in Salisbury, Md., which recently closed. “The owner Jeff Turner is a dynamo and has really fit in,” Kreer said. “He’s helping us become better as a company.”
APM may grow with each micro-merger, but Kreer still considers his company, “a small guy in an ever-growing sea of big guys.”
For him, that makes keeping up with customer expectations, especially when it comes to technology, increasingly important.
“We continue to venture further into technological and informational landscape of today with marketing and operations,” he said.
That means retraining himself and his staff with the use of technology constantly. “Just when you get something down, you have to learn something else,” Kreer said.
But the new technology has changed the company's marketing strategy for the better, and simplified the way that they talk to their customers. “Marketing is all online now and it’s been great,” he said. “Mobile devices have helped in many respects for food processing and obtaining larger commercial clients.”
As APM continues to amplify its voice, whether it’s through more technologically savvy marketing or a steady string of acquisitions, one thing is for certain: this family company and its close-knit team will continue to succeed as they deliver what customers want — quality pest control services.
The author is frequent PCT contributor and can be contacted at email@example.com.