DOWNERS GROVE, ILL. — The ServiceMaster Co. announced in early October that it has completed the sale of American Residential Services, its plumbing and HVAC business to Caxton-Iseman Capital and Royal Palm Capital Partners.
Caxton-Iseman, a New York private equity firm, is the majority investor in the transaction. Donald Karnes and David Slott, former officers of a subsidiary of ServiceMaster, are investors in the venture and will participate in the management of the company.
The cash proceeds of $100 million were in line with expectations and related book value. The company intends to use the proceeds to pay down debt and to finance acquisit ions in other service lines. The transaction, combined with the previously announced sale of American Mechanical Services, will result in the acceleration of the timing into 2006 and 2007 of $33 million of tax benefits that were previously expected to be realized in annual installments, primarily through 2012.
"This represents the culmination of a very comprehensive process led by our outside advisers William Blair & Co.," said Ernie Mrozek, president and chief financial officer. "We are pleased that our people will be joining reputable, well-financed buyers and that the business will remain headquartered in Memphis (Tenn.)."
The company announced that its Terminix business unit has acquired the assets of Safeguard Pest Control, which operates in 16 markets across the United States with annual revenues of more than $23 million.
"This transaction represents a continuation of our strategy to reallocate our capital into higher growth opportunities and creates new opportunities for Terminix to improve its service efficiency and processes," said J. Patrick Spainhour, chairman and CEO.
ServiceMaster serves residential and commercial customers through a network of more than 5,500 companyowned locations and franchised licenses. Its core services include lawn care and landscape maintenance, termite and pest control, home warranties, disaster response and reconstruction, cleaning and disaster restoration, house cleaning, furniture repair and home inspection.