July 09, 2014 8:15 PM ET

Diversified Consumer Services

Company Overview of The ServiceMaster Company, LLC

Company Overview

The ServiceMaster Company, LLC provides services to the residential and commercial customers worldwide. The company operates through five segments: Terminix, TruGreen, American Home Shield, ServiceMaster Clean, and Other Operations and Headquarters. The Terminix segment provides termite and pest control services under the Terminix brand name; and distributes pest control products. The TruGreen segment offers lawn, tree, and shrub care services primarily under the TruGreen brand name. The American Home Shield segment provides home warranties and preventative maintenance contracts for household systems and appliances primarily under the American Home Shield brand name. This segment offers resi...

860 Ridge Lake Boulevard

Memphis, TN 38120

United States

Founded in 1929

22,000 Employees

Phone:

901-597-1400

Key Executives for The ServiceMaster Company, LLC

Chief Executive Officer
Age: 54
Chief Financial Officer and Senior Vice President
Age: 50
President of American Home Shield and Chief Operating Officer of American Home Shield
Age: 52
President of Terminix
Age: 45
President of Franchise Relations
Age: 60
Compensation as of Fiscal Year 2014.

The ServiceMaster Company, LLC Key Developments

The ServiceMaster Company, LLC Enters into New Credit Agreement with Respect to New $1,825 Million Term Loan Facility Maturing 2021 and New $300 Million Revolving Credit Facility Maturing 2019

On July 1, 2014 (the closing date), in connection with the consummation of the initial public offering of 41,285,000 shares of the common stock, par value $0.01 per share of ServiceMaster Global Holdings, Inc., The ServiceMaster Company, LLC (SvM), the company’s indirect wholly-owned subsidiary, entered into a new credit agreement with respect to a new $1,825 million term loan facility maturing 2021 and a new $300 million revolving credit facility maturing 2019, with JPMorgan Chase Bank, N.A. as administrative agent, collateral agent and issuing bank, and a syndicate of lenders party thereto from time to time.  Borrowings under the Term Loan Facility, together with available cash and a portion of the net proceeds of the IPO, were used to repay in full borrowings outstanding under the Existing Credit Facilities. The Credit Facilities consist of the Term Loan Facility, a senior secured term loan facility in an original principal amount of $1,825 million, and the Revolving Credit Facility, which provides for revolving loans up to a maximum aggregate original principal amount of $300 million. A portion of the borrowings under the Revolving Credit Facility are available for the issuance of letters of credit and the issuance of swing line loans. Amounts under the Revolving Credit Facility may be borrowed in certain designated foreign currencies. The Term Loan Facility will mature on July 1, 2021. The Term Loan Facility will amortize in equal quarterly installments equal to 1.0% per annum of the original principal amount of the term loans until the maturity date. Voluntary prepayments of borrowings under the Term Loan Facility are permitted at any time, in minimum principal amounts, without premium or penalty, except that certain prepayments in connection with certain refinancing transactions within 12 months after the Closing Date will be subject to a prepayment premium of 1.0% of the principal amount prepaid. Subject to certain exceptions, the Term Loan Facility is subject to mandatory prepayment in an amount equal to: the net cash proceeds of (1) certain asset sales, (2) certain debt offerings and (3) certain insurance recovery and condemnation events; and 50% of annual excess cash flow (as defined in the Credit Agreement) for any fiscal year unless a certain secured leverage ratio target is met. The final maturity date of the Revolving Credit Facility will be July 1, 2019. If at any time the sum of the amount outstanding under the Revolving Credit Facility (including revolving loans, letters of credit outstanding and swing line loans there under) exceeds the total amount of lenders’ revolving commitments there under, prepayments of revolving loans and/or swing line borrowings will be required in an amount equal to such excess. The interest rates applicable to the term loans under the Term Loan Facility will be based on a fluctuating rate of interest measured by reference to either, at the borrower’s option, (i) an adjusted London inter-bank offered rate (subject to a floor of 1.0%), plus a borrowing margin of 3.25% or (ii) an alternate base rate (subject to a floor of 2.0%), plus a borrowing margin of 2.25%. The interest rates applicable to the loans under the Revolving Credit Facility will be based on a fluctuating rate of interest measured by reference to either, at the borrower’s option, (i) an adjusted London inter-bank offered rate, plus a borrowing margin of 3.25% or (ii) an alternate base rate, plus a borrowing margin of 2.25%.

The ServiceMaster Company, LLC Reports Un-Audited Consolidated Earnings Results for the First Quarter Ended March 31, 2014; Reports Impairment of Software and Other Related Costs for the First Quarter for 2014

The ServiceMaster Company, LLC reported un-audited consolidated earnings results for the first quarter ended March 31, 2014. For the quarter, the company reported revenue of $533 million, an increase of approximately 4% compared to $514 million in the same period in 2013. The company reported loss from continuing operations of $18 million, versus income from continuing operations of $6 million for the first quarter of 2013. Adjusted income from continuing was $11 million, Excluding a $48 million ($29 million net of tax), non-cash asset impairment charge related to the decision to abandon the deployment of a new operating system for American Home Shield compared to $6 million in last year. Adjusted EBITDA of $115 million, an increase of $12 million compared to $103 million in the same period in 2013. The increase was primarily driven by the impact of higher revenue and the transition of certain costs in the first quarter of 2014 to TruGreen, which the company spun-off on January 14, 2014. Loss from continuing operations before income taxes was $27 million compared to income from continuing operations before income taxes $12 million, net loss of $113 million compared to $23 million, net cash provided from operating activities from continuing operations was $21 million compared to $23 million, property additions was $14 million compared to $9 million and free cash flow was $4 million compared to $7 million for the last year. The company reported impairment of software and other related costs of $48 million for the first quarter for 2014.

The ServiceMaster Company Announces Unaudited Consolidated Earnings Results for the Fourth Quarter and Full Year Ended December 31, 2013; Provides Impairment Charges Guidance for the First Quarter of Fiscal 2014

The ServiceMaster Company announced unaudited consolidated earnings results for the fourth quarter and full year ended December 31, 2013. For the quarter, operating revenue was $713 million against $676 million a year ago. Loss from continuing operations before income taxes was $23 million against $20 million a year ago. Loss from continuing operations was $18 million against $2 million a year ago. Net loss was $18 million against $2 million a year ago. Adjusted EBITDA was $90 million against $83 million a year ago. Adjusted EBITDA (proforma) was $89 million against $73 million a year ago. Free cash flow was $151 million against $114 million a year ago. Proforma revenue was $533 million against $492 million a year ago. For the year, operating revenue was $3,189 million against $3,193 million a year ago. Loss from continuing operations before income taxes was $627 million against $827 million a year ago. Loss from continuing operations was $505 million against $713 million a year ago. Net loss was $506 million against $714 million a year ago. Net cash provided from operating activities from continuing operations was $252 million against $235 million a year ago. Adjusted EBITDA was $476 million against $571 million a year ago. Adjusted EBITDA (proforma) was $450 million against $413 million a year ago. Free cash flow was $147 million against $116 million a year ago. Proforma revenue was $2,293 million against $2,214 million a year ago. As a result of the TruGreen separation transaction, the company will be required to perform an interim impairment analysis as of January 14, 2014 on the TruGreen trade name. The assumptions used in this analysis will be developed with the view of the TruGreen business as a standalone company, resulting in an expected impairment charge of approximately $150 million in the first quarter of 2014.

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Recent Private Companies Transactions

Type
Date
Target
Spin-Off/Split-Off
November 14, 2013
TruGreen Companies L.L.C.
 

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