ServiceMaster Rises in Debut After Smaller Than Expected IPO
ServiceMaster Global Holdings Inc. (SERV), owner of the pest-control service Terminix, gained in its trading debut after raising $610 million in a U.S. initial public offering.
After pricing the IPO at $17 each, ServiceMaster rose 5.6 percent to $17.95 at the close of trading in New York. The shares had been offered for $18 to $21. The shares are listed on the New York Stock Exchange under the symbol SERV.
At $17 a share, ServiceMaster has a market value of $2.2 billion, according to the terms of its original filing. The Memphis, Tennessee-based company’s stable of products also includes American Home Shield Brands, which offers warranty coverage on household appliances, and home-cleaning service Merry Maids. It will use the money it raised to pay off debt.
ServiceMaster is returning to the public markets about seven years after private-equity fund Clayton, Dubilier & Rice LLC led a buyout of the company in a $5.5 billion deal. The company will pay some of its private-equity owners $21 million to terminate consulting agreements with them, according to the IPO filing. CD&R isn’t selling any shares in the offering.
More than half of ServiceMaster’s $2.3 billion in revenue comes from its Terminix brand last year, the company said in regulatory filings. Terminix has been on a buying spree as it tries to cement its status as the largest pest control company in the world.
In May, it said it purchased assets of eight pest control companies across ten states, and that it plans to keep doing so. Last September, Terminix said it acquired Care Pest & Wildlife, the largest pest control company in British Columbia.
The offering is the largest U.S. sale by a commercial services company since Aramark raised $834 million in December, according to data compiled by Bloomberg. Aramark is up 28 percent since its debut.
JPMorgan Chase & Co., Credit Suisse Group AG, Goldman Sachs Group Inc. and Morgan Stanley managed the IPO.
To contact the editors responsible for this story: Mohammed Hadi at firstname.lastname@example.org Elizabeth Wollman