Wednesday, March 04, 2015

Home News ServiceMaster gives lawn business as dividend

ServiceMaster gives lawn business as dividend

Industry News

The company is giving its owners TruGreen, which has $900 million in annual sales.

| January 13, 2014

ServiceMaster Co. is adding a new twist to the buyout business’s dividend bonanza.

Unlike the many private-equity-backed companies that have recently raised new debt or dipped into their coffers to pay their owners cash, ServiceMaster, the parent company of Terminix and Merry Maids, is giving up something else to its owners: a lawn-care business with $900 million in annual sales.

ServiceMaster is spinning off its TruGreen business, which accounts for about a third of its sales but has struggled recently, and giving it to private-equity owner Clayton, Dubilier & Rice LLC.

Private-equity-backed companies sold more than $130 billion worth of bonds and loans to fund payouts to their owners in 2012 and 2013 in back-to-back record-breaking years, according to Standard & Poor’s Capital IQ LCD data service. Rarely, however, do they hand over entire businesses.

“A dividend of the perhaps bottoming TruGreen business results in a smaller, less valuable ServiceMaster, a negative development as there is no planned debt reduction,” Moody’s Investors Service senior analyst Edmond DeForest said in a note to investors late last year. Moody’s is reviewing ServiceMaster’s credit for a possible downgrade because of the spinoff.

For more, click here

Top news

PLANET unveils a new name

Ten years after it was formed, the industry’s national association has updated its name and logo as part of a strategic rebranding.

Free Grounds Guys webinar announced

Landscapers looking for solutions to finding qualified employees can attend the March 4 event.

Rules on recruiting

Knowing what to do isn't the challenge faced by executives – finding who to do it is.

Ariens reflects on passing of past president

Michael Ariens had recently celebrated his 55th anniversary with the company.

Plants and personalities

L&L attended the iLandscape show in Illinois and learned about native landscaping and how to deal with different types people.

x