Another acquisition in the facility services industry — see who is enhancing their services in the commercial and education sectors

by Brianna Crandall — July 19, 2017 — ABM Industries, a provider of facility solutions throughout the USA and beyond, announced last week it has entered into a definitive agreement to acquire GCA Services Group from affiliates of Thomas H. Lee Partners, L.P. and Goldman Sachs Merchant Banking Division.

GCA provides facility services in the education and commercial industries, specializing in facilities maintenance, janitorial services, grounds management, vehicle services and outsourced workforce solutions. With over 37,000 employees in 46 states, the District of Columbia, and Puerto Rico, GCA is headquartered in Cleveland, Ohio.

Scott Salmirs, president and chief executive officer of ABM Industries, commented:

This transformative and accretive acquisition will accelerate our 2020 Vision by creating a broader platform upon which we can grow profitably and further distinguish ABM as an industry-focused solutions provider. We look forward to gaining insights from GCA, a well-established industry leader with top talent. GCA’s client-centric goals and philosophies align closely with those of ABM, and we are excited about the value this combination will bring to our clients, our employees and our shareholders.

Bob Norton, chairman, president and chief executive officer of GCA, added:

We are excited to be joining the ABM family, which will allow us to better serve our clients with more services and greater reach. We believe our combination with a company that shares our vision for profitable growth will lead to significant long-term value for all stakeholders.

Strategic rationale

The acquisition aligns with the core principles of ABM’s 2020 Vision strategy of achieving long-term profitable growth:

  • Industry-focused approach: ABM and GCA have complementary organizational structures by industry group, and the combination will enhance ABM’s presence in the education market and commercial industry. The combined expertise in these areas will reinforce ABM’s 2020 Vision evolution from a facility solutions provider managed by service line to an industry-focused organization.
  • Profitable growth: GCA has a demonstrated track record of longstanding revenue growth and profitability driven by its industry-focused operational strategies. The acquisition is expected to increase the overall margin profile of ABM and to solidify the company’s 2020 Vision-driven, client-centric structure and strategy for long-term profitable growth.
  • The ABM Way: The transaction will provide a broader platform for ABM to implement its standard operating practices, which, when combined with the best-in-class operations of GCA, will enhance the company’s capabilities for its clients, and accelerate cross-selling of its technical solutions and specialty engineering services.
  • Valuable synergies: The acquisition is expected to produce cost synergies in overhead and procurement, while also enabling greater efficiencies in areas such as shared services and IT.

Chris Crampton, managing director of Goldman Sachs Merchant Banking Division, concluded:

The combined company will create a market leader in facilities services, and will enable management to offer its customers additional locations, services, expertise and resources. We look forward to supporting Scott and the ABM management team as they continue to successfully execute on their 2020 Vision.

For more information about ABM, GCA or the acquisition, see the companies’ respective Web sites.