Downers Grove, IL, February 2, 2006--ServiceMaster announced today several actions designed to increase shareholder value.
To expand its successful disaster restoration business, the Company has entered into an agreement to acquire InStar Services Group, which is engaged in the commercial disaster response and reconstruction business.
The Company also announced its intention to sell its American Residential Services (ARS) and American Mechanical Services (AMS) companies so it can concentrate resources on its main growth businesses. The Company also announced the launch of Project Accelerate, which is designed to increase the efficiency and effectiveness of all business and field support functions.
The Company announced today a strategic expansion of commercial disaster restoration through the proposed acquisition of InStar Services Group, Inc. The Company expects to complete the acquisition of InStar during the first quarter after clearing antitrust review.
With estimated fiscal year 2005 revenues of approximately $130 million, InStar is a leading direct provider of commercial disaster response and reconstruction services in the United States. InStar provides a continuum of services, from planning prior to an event, to emergency response following the event and continuing service through cleaning, recovery and reconstruction--a customer relationship that can span more than 18 months.
"The acquisition of InStar will complement the services of ServiceMaster Clean and changes the game in the commercial disaster response and restoration market," said Jonathan Ward, Chairman and Chief Executive Officer. "Combining the capabilities of InStar with ServiceMaster Clean will create a single source solution for the delivery of comprehensive commercial loss services on a national basis, and an opportunity for our customers to significantly reduce business interruption."
In the delivery of services to national, regional and local customers, InStar will handle the work directly or in combination with ServiceMaster Clean franchisees. Currently, InStar has 24 offices covering 28 states in the Southeast, Southwest, Mid-Atlantic and Northeast Regions and has the ability to mobilize a work force and manage projects nationwide. ServiceMaster Clean, the market leader in residential disaster restoration, has over 1,000 disaster restoration facilities in the United States and Canada. By combining their capabilities, they will be prepared to deliver the full spectrum of services to both commercial and residential customers.
The Company announced that it is exploring alternatives for American Residential Services (ARS) and American Mechanical Services (AMS) including the sale of both businesses. The Company has retained William Blair & Company as its financial advisor to assist in this process. The Company has stated that it does not expect to disclose developments concerning the status of this process unless and until it and its Board of Directors has approved a definitive transaction.
"Our best opportunity to build shareholder value is to have fewer priorities and to pursue them with greater intensity. We have applied that thinking to both our strategies and our portfolio," said Ward. "This action reflects the Company's continued commitment to brands which have the ability to achieve sustainable national market leadership and a high potential to achieve significant and consistent growth in share, revenue and return on capital."
The Company also announced the launch of Project Accelerate, an internal, multi-phase reengineering project designed to improve the effectiveness and efficiency of all functional support areas.
