8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 23, 2020

ANDOVER NATIONAL CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	000-55882	83-2216345
(State of Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

333 Avenue of the Americas, Suite 2000
Miami, FL	33131-2185
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (786) 871-3333

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Securities registered under Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Not Applicable	Not Applicable	Not Applicable

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

Item 8.01 Other Events

On September 23, 2020, Andover National Corporation (the “Company”) released a letter from the Company’s Executive Chairman and Chief Executive Officer (the “Chairman’s Letter”) to the Company’s stockholders. A copy of the Chairman’s Letter is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information reported under this Item 8.01 of Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

The Chairman’s Letter contains forward-looking statements within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that describe future outcomes or expectations that are usually identified by words such as “will,” “should,” “could,” “plan,” “intend,” “expect,” “continue,” “forecast,” “believe,” and “anticipate” and include, for example, any statement made regarding the Company's future results. Actual results may differ materially as a result of various risks and uncertainties, including the risks and uncertainties expressed in the cautionary statements and risk factors in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. The Company may not be able to predict and may have little or no control over many factors or events that may influence its future results and, except as required by law, shall have no obligation to update any forward-looking statements.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The following exhibits are included with this Current Report on Form 8-K

99.1 Chairman’s Letter dated September 23, 2020.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ANDOVER NATIONAL CORPORATION
Date: September 23, 2020	By:	/s/ Jeffrey C. Piermont
	Name:	Jeffrey C. Piermont
	Title:	President and Chief Operating Officer

EX-99.1

 Exhibit 99.1

September 23, 2020

Dear Andover Shareholders:

I am pleased to update you on the status of Andover National Corporation. Despite the headwinds we felt from COVID-19, Andover has made substantial progress growing the company and delivering on our vision. Notably, in February 2020 we closed our second and third platform acquisitions: Smith’s Tree Care located in Newport News, VA provides commercial tree maintenance services and Potter’s Lawn and Landscaping located in Pompano Beach, FL provides commercial lawn and landscaping services. After closing the acquisition of these companies in 2020 (along with Alabama based Superior Services, which closed in 2019), we now have three strong growth platforms, run by exceptionally talented managers.

Of great importance, all our businesses were deemed “essential” by local authorities and continued operating during the pandemic shutdowns. In fact, despite seeing tangible softness in late Q1 2020 (and some labor shortages driven by pandemic relief checks), all our companies are seeing demand for their services increase during the pandemic.

Notably, amidst all this general uncertainty, we are making good progress on expanding our existing platform companies. Smith’s Tree Care has secured a new yard in Chesapeake, VA which will be fully equipped and operational in Q4 2020. With a modest investment of less than $600,000, Smith’s Tree Care expects incremental recurring annual revenues of at least $1.0 million from this project after one year of being fully operational, growing the business by roughly 25% when complete. Smith’s Tree Care sees a multi-year opportunity to grow organically in the local market due to its strong reputation and steady demand growth.

At the same time, Potter’s Lawn and Landscaping has identified several bolt-on acquisition opportunities which could more than double its size quickly. The acquisition multiples we expect to pay for these “bolt-ons” will likely be well-below what other buyers may need to pay, as our partners’ leverage their local relationships, reputation, and knowledge to source deals for Andover.

As soon as I can travel without quarantining requirements, we expect to accelerate our pace of work through the backlog of companies we are talking to and who are interested in partnering with Andover. Our pipeline continues to grow quickly, as Milun Patel, our CFO and lead development officer, just completed a trip in September where he traveled throughout Florida, Texas and Virginia and met with numerous companies that indicated a strong interest in our structure. It is clear to us COVID-19 has created the impetus for many owners to contemplate succession and/or monetize part of their company. We are now more confident than ever that we have a better solution for the owners of essential service businesses who want liquidity, but also want to keep working and growing.

To date, we have spent roughly $8.7 million on acquisitions, before fees, overhead and initial start-up costs. Our acquisition multiples are in the mid to low single-digit range on adjusted earnings, and we had approximately $9.3 million of available cash as of June 30. As we spend our remaining funds on acquisitions and growth opportunities, we continue to be in good financial condition as we approach “break-even” at the Andover National holding company level.

While many institutional investors have been “frozen” and are just coming out of their COVID shells, we continue to have discussions with various investors who are interested in what we are doing and our differentiated approach. We believe face-to-face meetings are critical and we look forward to getting back to work.

Please stay safe and feel free to reach out with any questions and feedback, we look forward to hearing from you.

Sincerely,

Peter Cohen

Executive Chairman and Chief Executive Officer