By Lisa Kerner
Charlotte, N.C., March 19 - The ServiceMaster Co. said it entered into a definitive merger agreement to be acquired by an investment group led by Clayton, Dubilier & Rice, Inc. for $15.625 per share in cash, which equals a total enterprise value of about $5.5 billion, including the assumption of debt.
ServiceMaster's board of directors has approved the merger agreement and recommended that its shareholders adopt the agreement at a special meeting to be held in the second quarter.
"The board of directors, with the aid of management and our financial advisers, conducted a thorough review of strategic alternatives available to the company and concluded that this transaction is in the best interests of our stockholders," chairman and chief executive officer J. Patrick Spainhour said in a company news release.
"The board's support is based on the conviction that this transaction will deliver value to shareholders that is superior to what the company could achieve under its current business plan."
Once the transaction is complete, Clayton, Dubilier & Rice operating partner George W. Tamke will assume the position of chairman of the ServiceMaster board and Spainhour will remain chief executive officer, according to the release.
Banc of America Securities LLC, Citigroup Global Markets Inc. and JPMorgan Chase Bank, NA have committed debt financing for the transaction.
Memphis-based ServiceMaster provides cleaning, landscaping and other services to residential and commercial customers through over 5,500 company-owned and franchised locations.
Clayton, Dubilier & Rice is a private equity investment firm based in New York and London.
| Acquirer: | Clayton, Dubilier & Rice, Inc.
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| Target: | The ServiceMaster Co.
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| Transaction value: | $5.5 billion
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| Payment per share: | $15.625
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| Announcement date: | March 19
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| Expected closing: | Upon approvals
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| Stock price for target: | NYSE: SVM; $13.47 on March 16
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