ServiceMaster Sheds Brands and Becomes Terminix

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  • ServiceMasters enters agreement to sell SMB for $1.533 billion
  • Upon consummation of the transaction, ServiceMaster will change its name to Terminix

ServiceMaster today announced that it has entered into an agreement with Roark Capital to sell ServiceMaster Brands for $1.533 billion. Upon consummation of the transaction, which is expected in the next 30 to 60 days, ServiceMaster Global Holdings will change its name to Terminix.

Earlier this year, we published a Commentary estimating that SERV should clear “over ~$1.0 billion in net proceeds for the SMB business” and today ServceMaster announced that the “Company expects net proceeds of over $1.1 billion from the divestiture after paying approximately $420 million in taxes”

Below is our sum-of-the-parts analysis from our Commentary in January:

“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.”

We expect that this divestiture will ultimately bring ServiceMaster back to their chair at the pest control M&A table.

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About Paul Giannamore

Managing Director at The Potomac Company where I head the firm's strategy consulting and investment banking practice focused on the structural pest control and integrated facilities services industries. I write the Pest Control M&A Weekly Commentary and The Potomac Pest Control Executive, newsletters read by thousands pest control professionals in scores of countries (you can subscribe to it below). In a nutshell, I do two things: (1) advise shareholders and senior management of pest management firms on creating value in their businesses, (2) advise sellers on the sale of their businesses. Based in Geneva, Switzerland, I'm a graduate of Cornell University, and I speak Italian, Spanish, Arabic and broken French. Join me on LinkedIn