ServiceMaster, Buyers Agree to $100M Fees if Deal Fails

ServiceMaster Co. and investors seeking to buy the lawn care and pest control provider agreed to a $100-million fee if a $4.5-billion deal collapses.

Under the proposed deal, which was announced March 19, ServiceMaster stockholders would receive $15.625 in cash for each outstanding share from an investor group led by private-equity firm Clayton Dubilier & Rice Inc. That group also would assume about $1.02 billion in debt.

According to a filing Tuesday with the Securities and Exchange Commission, ServiceMaster and the Clayton group signed a definitive agreement whereby ServiceMaster would have to pay the private-equity firm a $100-million termination fee under certain specified conditions.

Alternately, if the investment group and its subsidiary fail to get financing for the deal then they would have to pay $100 million to Downers Grove-based ServiceMaster, the filing said.
 
ServiceMaster was pressured by shareholders to consider a sale or buyout after years of declining financial performance.

The company is moving its headquarters to Memphis, Tenn., where many of its subsidiaries are located. The move is expected to be complete by November.