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ServiceMaster Global Holdings to sell other brands, focus on Terminix

|  September 2, 2020

LOGO: SERVICEMASTER

On Sept. 2, Memphis, Tenn.-based ServiceMaster Global Holdings entered into an agreement to sell its ServiceMaster Brands businesses to an affiliate of Roark Capital, an Atlanta, Ga.-based private equity firm, for $1.553 billion. The transaction is expected to close within the next 60 days. ServiceMaster Global Holdings will change its name to Terminix at closing.

According to a news release:

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 12-month period ended June 30, 2020.

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.

“This transaction represents a tremendous outcome for the stakeholders of both of our businesses,” ServiceMaster Chairman and interim CEO Naren Gursahaney said in the news release. “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.”

PMP will continue to follow this breaking story. Stay tuned for additional updates.

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Heather Gooch

About the Author:

Heather Gooch is the editor for PMP magazine. She can be reached at hgooch@northcoastmedia.net or 330-321-9754.

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