ServiceMaster going private in $4.7B deal

NEW YORK (CNNMoney.com) -- ServiceMaster is being taken private in a cash deal worth $4.7 billion.

Shareholders of ServiceMaster (Charts) will receive $15.625 a share, a premium of 16 percent over Friday's closing price. Assumed debt brings the total value of the deal to $5.5 billion, according to a release from Clayton, Dubilier & Rice, the private equity group leading the buyout.

ServiceMaster stock was up $1.65, or 12.3 percent, at $15.12 in morning trading. The company has 303 million shares outstanding.

Memphis-based ServiceMaster owns a number of home and commercial services firms through 5,500 company-owned and franchised locations. Its brands include TruGreen, TruGreen LandCare, Terminix, American Home Shield, InStar Services Group, ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec.

ServiceMaster Chairman and CEO J. Patrick Spainhour will continue as CEO, although he will give up the chairman position to George Tamke, an operating partner with Clayton, Dubilier & Rice.

Private equity interest in ServiceMaster was first reported in early March. Its main publicly traded competitors are Rollins (Charts), which owns the Orkin pest control business, and ABM Industries (Charts), which provides cleaning, engineering, and maintenance to office buildings.

ServiceMaster shares have gained 27 percent since Nov. 28, when it said it was putting itself up for sale amid higher costs and weak customer retention.

Last month, it said retention rates had started to improve as it used direct mail and other marketing efforts to go after new customers, putting less emphasis on telemarketing.

The company plans to move its headquarters to Memphis, Tennessee, from Illinois by early July, ServiceMaster spokesman Steve Bono told Reuters.

"If this deal is looking to close at the end of the second quarter, early third quarter, that move would be substantially done before it closes," Bono said.

Morgan Stanley and Goldman Sachs acted as financial advisers to ServiceMaster.

--Reuters contributed to this report

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