ABM Industries Near Deal to Buy GCA Services for $1.25 Billion
July 11 2017 - 9:29PM
Dow Jones News
By Ezequiel Minaya
ABM Industries Inc., one of the nation's largest providers of
janitorial and building services, is near a deal to acquire
privately held rival GCA Services Group for $1.25 billion in cash
and stock, according to people familiar with the matter.
A deal could be announced as soon as Wednesday, the people said.
The tie-up, which will expand New York-based ABM's reach in the
educational and commercial markets, is expected to close by
September after any regulatory hurdles are cleared.
GCA, based in Ohio, has traded hands a few times in recent
years. It is currently owned by Goldman Sachs Group Inc. and
private-equity firm Thomas H. Lee Partners LP. GCA was acquired
from Blackstone Group LP in 2016. Terms of that deal weren't given.
Blackstone bought GCA in 2012 from a group led by investment firm
Nautic Partners LLC for an undisclosed sum.
ABM, which has a market value of about $2.2 billion, will pay
$850 million in cash and $400 million in common stock for GCA, the
people said. ABM will incur a $70 million charge in connection with
the deal, and it is expected to add about $1.1 billion in revenue
after a year, with $600 million coming in the education industry
group.
ABM provides cleaning, parking and maintenance, among other
services, to office buildings and other facilities. GCA provides
similar custodial services and has aggressively expanded into
public schools.
The combined company will have a total of 137,000 employees. In
2016, ABM's annual revenue rose 5% to $5.14 billion from a year
earlier. Last month, the company unloaded its government-services
business for $35.5 million to Valiant Integrated Services LLC.
Shares of ABM have climbed 9.8% over the past 12 months. On
Tuesday, they closed up a penny at $40.69.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
July 11, 2017 21:14 ET (01:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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