Enclean Analysis

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Why was EnClean so successful early on? Why is EnClean having so much trouble? One of the biggest reasons for EnClean to be successful in the beginning was the fact that the two founders made perfect partners. Waddell and Tarrillion had known each other for years, they had complimentary skills, same moral standards and in the beginning the same clear vision of the company.

Another success factor for EnClean was the dedication and willingness to take a lot of risks of the owners. They both put almost all they had into the company (Waddell put another $250,000 on top of the $250,000 they had both put in the beginning to save the company), engaging in leveraged buyouts, and taking on a lot of debt. Also, as the company grew rapidly with approximately 20% internal growth per year through acquisitions and internal growth, they put a lot of effort in bringing the “conquered and conquerors” together to be able to work out a common strategy for the future. This successful Post-Merger Integration was very important for EnClean’s success in the beginning.

Of course, the nature of the industry played its part in letting EnClean become so successful. The open shop laws in Texas and Louisiana and the price difference between union and non-union labor created this highly fragmented market, which was full of players who either did not know how to grow or did not want to grow because they did not have the managerial background to be able to do so. EnClean entered several service industries and understood that there was a need for a multi-service company that could supply all services a company required. They incentivized their salesmen to cross-sell, which many of them did successfully, which enabled them to grow both because of their increased market share and due to the added-on services and companies. However, while it seemed quite easy to find suitable companies to acquire in the beginning, EnClean found it increasingly more difficult to find them later which led to...
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