News Column

ServiceMaster shares rise 4.4% Friday

June 27, 2014

By Ted Evanoff, The Commercial Appeal, Memphis, Tenn.



June 27--Home maintenance giant ServiceMaster's stock rose 4.4 percent Friday, a day after the Memphis company's initial public offering.

The stock closed at $18.75 per share, up 80 cents from Thursday's close.

Analysts described the IPO by ServiceMaster Global Holdings LLC as disappointing because the firm, controlled by a New York investor, failed to net a higher IPO price. On Thursday morning, the company sold 35.9 million shares at $17 each.

Said a blogger Friday on the investor web site Seeking Alpha: "The company, best known for its termite business, operates in a stable but attractive industry. Unfortunately, its previous private-equity owners saddled the company with debt, making an investment not attractive at the moment."

New York investors Clayton Dubilier & Rice LLC led the $5.5 billion buyout of the company in 2007. More than half of ServiceMaster's $2.3 billion in revenue last year came from Terminix.

ServiceMaster employs 13,000 workers, including 2,300 in Memphis, and independent franchises employ another 31,000 workers.

One of the largest for-profit businesses based in the Memphis area, ServiceMaster is the parent company to national brands American Home Shield, AmeriSpec, Furniture Medic, Merry Maids, ServiceMaster Clean and Terminix, which originated in 1932 at the E.L. Bruce Co. of Memphis.

As part of its restructuring strategy, ServiceMaster in February eliminated 105 jobs at its corporate headquarters. Its TruGreen residential lawn care business was also spun off as a separate company.

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(c)2014 The Commercial Appeal (Memphis, Tenn.)

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Source: Commercial Appeal (Memphis, TN)


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