Ted Evanoff|Memphis Commercial Appeal
Atlanta investor Roark Capital Management LLC took control of ServiceMaster Brands on Thursday, completing the $1.55 billion buyout of the Memphis-based home services business.
The investor bought the business from ServiceMaster Global Holdings Inc., which is being renamed Terminix Global Holdings Inc. The SERV ticker symbol on the New York Stock Exchange will changeon Monday to TMX.
The deal was announced in September and completes the dismantling of ServiceMaster Global since its move to Memphis from suburban Chicago in 2007. At the time it was the fourth-largest publicly traded company based in the city and employed as many as 2,400 people in Memphis.
Business units spun off since then as standalone companies include TruGreen and American Home Shield. Both are based in Memphis. Investors who held large stakes in the company sought the spinoffs as a way to pay off corporate debt and provide cash for shareholders.
Pest control provider Terminix, founded in Memphis in the 1930s, was the largest segment of the old ServiceMaster Global.
In a statement released Thursday, Terminix Global’s new chief executive officer, Brett Ponton, says Terminix is positioned to satisfy consumers and its shareholders. The company includingfranchises employs 10,500 people and has2.8 million customers in 24 nations, the company says.
“Terminix is moving ahead,” Ponton’s statement says, “with a laser focus on being the preferred pest control company in the industry. We look forward to continuing to build on the progress underway to further enhance the customer experience that will drive consistent, profitable growth. We see tremendous potential to further capitalize on the powerful Terminix brand name, strong service culture, and significant scale to deliver greater value for all our stakeholders. Our talented team is energized and looks forward to forging even stronger connections with our customers and local communities.”
ServiceMaster stock traded late Thursday morning at $40 per share. The price had edged up to $43 when the deal was revealed last month.
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Roark Capital acquired a stable of national brands including Furniture Medic, Merry Maids, ServiceMaster Clean and ServiceMaster Restore. Head offices for the operating units are expected to remain in Memphis.
Terminix Global reported it will hold $1.1 billion after taxes and fees are paid on the Roark Capital purchase. With the money, Terminix Global will pay off $800 million in debts and earmark the remainder for stock repurchases or possible buyouts of other firms.
Payment on the largest chunk of debt, a $750 million high-yield bond, is due Nov. 15, the company reported. For stock repurchases, the board of directors has authorized buying as much as $400 million worth of Terminix Global shares over the next three years.
