- Transaction transforms ServiceMaster Global Holdings into a
pure-play, global pest control business with sharpened focus
- ServiceMaster Global Holdings will change its name to Terminix
at closing
- Roark Capital will be a strong and supportive owner of
ServiceMaster Brands with ownership of the ServiceMaster name
- Proceeds to be used by Terminix for debt reduction, organic and
inorganic investments in pest control and return to
shareholders
ServiceMaster Global Holdings, Inc. (NYSE: SERV), a leading
provider of essential services to residential and commercial
customers in the termite, pest control, health-based cleaning and
restoration markets, today announced that, following a thorough
strategic review process, it has entered into an agreement to sell
its ServiceMaster Brands businesses to an affiliate of Roark
Capital, for $1.553 billion. The transaction is expected to close
in approximately 30 to 60 days, subject to customary legal and
regulatory closing conditions.
The transaction will position the Company’s two businesses,
Terminix and ServiceMaster Brands, to pursue their own distinct
strategies and growth opportunities. Terminix will benefit from
enhanced management focus and resources for its global pest control
business, while Roark Capital will provide ServiceMaster Brands
with a strong and supportive owner to build upon its leading market
positions and trusted brand names.
ServiceMaster Brands includes a portfolio of residential and
commercial services brands such as ServiceMaster Restore,
ServiceMaster Clean, Merry Maids, AmeriSpec, and Furniture Medic,
which operate through a network of franchised and company-owned
businesses that generated $2,663 million in system-wide sales, and
$256 million in revenue for the twelve-month period ended June 30,
2020.
“This transaction represents a tremendous outcome for the
stakeholders of both of our businesses,” said ServiceMaster
Chairman and interim CEO Naren Gursahaney. “Through this
divestiture, Terminix will become a pure-play, global pest control
company, better positioned for the future. We look forward to
continuing to advance our commitment to predictable, sustainable
growth and profitability at Terminix through the cultural and
operational transformation of the business that is underway and
remain focused on driving enhanced value for our shareholders,
customers and employees.”
Mr. Gursahaney added, “ServiceMaster Brands is the largest
franchisor in commercial and residential services with over $2.6B
in system-wide sales in the large and growing restoration and
health-based cleaning services industries. With a resilient market
position, trusted brand names, and exciting new growth strategies,
the business and its experienced teams and franchisees are
well-positioned for strong long-term growth. Roark Capital has a
strong track record of supporting franchisees and dedicating
substantial resources to growing need-based services businesses,
and we are confident that ServiceMaster Brands has a bright future
ahead.”
“We are thrilled to welcome ServiceMaster Brands to our family,”
said Mike Thompson, Managing Director at Roark Capital. “We are
excited to partner with the team and support ServiceMaster Brands’
long-tenured and successful franchisees to realize the tremendous
growth potential of these brands.”
The Company expects net proceeds of over $1.1 billion from the
divestiture after paying approximately $420 million in taxes. The
remaining proceeds, net of fees, will be earmarked for reduction of
debt to achieve its target leverage ratio of between 2.5 and 3.0
times Adjusted EBITDA, continued investment in its core pest
control and termite businesses to drive organic growth and
productivity, accretive acquisitions to further strengthen its
businesses, and continued ongoing returns to shareholders.
Third Quarter 2020 Outlook
Third-quarter 2020 continuing operations revenue guidance is
affirmed between $495 million and $515 million. Third-quarter 2020
continuing operations Adjusted EBITDA guidance is affirmed between
$80 million and $90 million. Third-quarter 2020 ServiceMaster
Brands revenue guidance is affirmed between $63 million and $68
million. Third-quarter 2020 ServiceMaster Brands Adjusted EBITDA
guidance is affirmed between $23 million and $27 million.
Lazard served as financial advisor to ServiceMaster, and
Wachtell, Lipton, Rosen & Katz served as ServiceMaster’s legal
advisor on the transaction.
J.P. Morgan served as financial advisor to Roark Capital, Paul,
Weiss, Rifkind, Wharton & Garrison LLP served as legal advisor
on the transaction, and Barclays provided financing for the
transaction.
About ServiceMaster
ServiceMaster Global Holdings, Inc. is a leading provider of
termite and pest control, cleaning and restoration services in both
the residential and commercial markets, operating through an
extensive service network of more than 8,000 company-owned
locations and franchise and license agreements. The Company’s
portfolio of well-recognized brands includes AmeriSpec (home
inspections), Copesan (commercial national accounts pest
management), Furniture Medic (cabinet and furniture repair), Merry
Maids (residential cleaning), Nomor (European pest control),
ServiceMaster Clean (health-based commercial cleaning),
ServiceMaster Restore (restoration and reconstruction), Terminix
(termite and pest control), and Terminix Commercial (commercial
termite and pest control). The Company is headquartered in Memphis,
Tenn. Go to servicemaster.com for more information about
ServiceMaster or follow the Company at
LinkedIn.com/Company/ServiceMaster, Twitter.com/ServiceMaster or
Facebook.com/ServiceMaster.
About Roark Capital
Roark focuses on franchised and multi-unit business models in
the retail, restaurant, consumer and business services sectors.
Since inception, affiliates of Roark have invested in 78
franchise/multi-unit brands which generate approximately $41
billion in annual system revenues from 39,000 locations in 50
states and 81 countries. For more information, please visit
www.roarkcapital.com.
Information Regarding Forward-Looking Statements
This press release contains forward-looking statements and
cautionary statements. Forward-looking statements can be identified
by the use of forward-looking terms such as “believes,” “expects,”
“may,” “will,” “shall,” “should,” “would,” “could,” “seeks,”
“aims,” “projects,” “is optimistic,” “intends,” “plans,”
“estimates,” “anticipates” or other comparable terms.
Forward-looking statements are subject to known and unknown risks
and uncertainties, many of which may be beyond our control,
including, without limitation, the risks and uncertainties
discussed in the “Risk Factors” and “Information Regarding
Forward-Looking Statements” sections in the Company’s reports filed
with the U.S. Securities and Exchange Commission. Such risks,
uncertainties and changes in circumstances include, but are not
limited to: the possibility that regulatory and other conditions to
the sale of our ServiceMaster Brands businesses are not received or
satisfied on a timely basis or at all, and the possibility of
changes in the anticipated timing for closing the sale; the
possibility that we may not fully realize the projected benefits of
the sale; business disruption during the pendency of or following
the sale; the impact of reserves attributable to pending Litigated
and Non-Litigated Claims for terminate damages; the impact of
COVID-19 on our operations; lawsuits, enforcement actions and other
claims by third parties or governmental authorities; compliance
with, or violation of environmental health and safety laws and
regulations; weakening general economic conditions; weather
conditions and seasonality; the success of our business strategies,
and costs associated with restructuring initiatives. We caution you
that forward-looking statements are not guarantees of future
performance or outcomes and that actual performance and outcomes,
including, without limitation, our actual results of operations,
financial condition and liquidity, and the development of the
market segments in which we operate, may differ materially from
those made in or suggested by the forward-looking statements
contained in this press release. The Company assumes no obligation
to update the information contained herein, which speaks only as of
the date hereof.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200902005326/en/
Investor Relations: Jesse Jenkins 901.597.8259
Jesse.Jenkins@servicemaster.com
Media: James Robinson 901.597.7521
James.Robinson@servicemaster.com
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