On Aug. 25, ABM (NYSE: ABM) announced that it has reached a definitive agreement to acquire Able Services, a leading facilities services company headquartered in San Francisco, in a cash transaction valued at $830 million. The transaction is expected to close by the end of September, subject to approval under the Hart-ScottRodino Antitrust Act and other closing conditions.
Founded in 1926, Able is the largest family-owned provider of building maintenance, engineering and facility operations in the United States, with revenues of $1.1 billion and adjusted EBITDA of $65 million, normalized for COVID-19-related impacts. Engineering services represents approximately 60% of the company's total revenues, with janitorial services accounting for approximately 40%.
Able’s 80% unionized workforce provides facility services to over one billion square feet of real estate, strengthening ABM’s national presence. ABM expects the transaction to be accretive to adjusted earnings per share immediately after closing. The acquisition will also bolster ABM’s engineering and technical services, which are expected to generate almost $2 billion of combined annualized revenue and expand ABM’s sustainability and energy efficiency offerings amid growing demand for environmentally responsible solutions.
Scott Salmirs, President and Chief Executive Officer of ABM, commented:
“Able’s strong engineering capabilities will assist us in achieving our strategic growth objectives as we build upon our offerings to include integrated facilities services and multi-service bundles to our core clients. At the same time, Able’s substantial janitorial services business in key geographies and long-standing relationships with large corporate clients are perfectly aligned with our broader portfolio.
We will gain over $400 million in janitorial services revenue at a time when safety and health are of primary importance to commercial clients. Through our EnhancedClean offering, ABM has become a leader in virus protection services, and we believe that our combined janitorial business will be well-positioned to meet continued demand for these services in a post-pandemic environment.
We greatly admire Able’s heritage, excellent reputation, and highly talented team members. Importantly, we both are mission driven organizations, and our collective purpose has never meant more, while the value and demand for what we do continues to increase.”
Paul Saccone, Chief Executive Officer of Able, said, “This combination provides us with an excellent opportunity to continue to grow our business, supported by the resources of ABM. We both have long histories of serving clients and building a collegial culture that prioritizes being a trusted provider to some of the largest companies in the world, delivering customized services and creating leadership paths for our employees. We look forward to working together to continue to provide clients with high quality services and support.”
ABM expects to achieve approximately $30 million to $40 million in cost synergies from the acquisition, the majority of which are expected be realized within the first year following completion of the transaction.
Goldman Sachs & Co. LLC is serving as exclusive financial advisor to ABM in the transaction; Jones Day is its legal advisor. Stifel and Morrison & Foerster are serving as Able’s financial and legal advisors, respectively.