Building maintenance and janitorial services provider ABM Industries Inc said it would buy privately held rival GCA Services Group for about $1.25 billion in cash and stock to enhance its presence in the education and commercial markets.
(Reuters) – Building maintenance and janitorial services provider ABM Industries Inc said it would buy privately held rival GCA Services Group for about $1.25 billion in cash and stock to enhance its presence in the education and commercial markets.
New York-based ABM’s offer for GCA Services — owned by Goldman Sachs Group Inc and private equity firm Thomas H Lee Partners LP — includes $851 million in cash and $399 million in ABM common stock, ABM said.
The deal will provide revenue contribution of about $1.1 billion, with $600 million coming from the education industry, after the first full year of ownership, ABM said.
ABM, which expects to incur about $70 million in one-time costs related to the deal, provides cleaning, parking and other general maintenance and repair services to office buildings, data centers and educational institutions among others.
Cleveland-based GCA Services provides janitorial and custodial services to markets including K-12 schools, higher education and corporate office buildings.
Annual cost savings of $20 million to $30 million, are expected to be realized by the second full year of ownership, ABM said.
Affiliates of Thomas H Lee Partners LP and Goldman Sachs’ merchant banking division will own about 14 percent of ABM’s outstanding shares, following the close of the deal by September 2017.
J.P. Morgan Securities LLC advised ABM, while Goldman Sachs was financial adviser to GCA Services.
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