Consolidators Jockey For Position
The big keep getting bigger.
During the last few months, the four major PHC consolidators — American Residential Services, Comfort Systems, GroupMAC and Service Experts — have all announced major acquisitions or financial results. And as each jockeys for national dominance, more rounds of acquisitions are expected.
Comfort Systems announced the biggest single acquisition — purchasing S.I. Goldman Co., a central FL-based mechanical contractor. S.I. Goldman finished No. 69 last year on PM’s annual Pipe Trade Giants, with a pipe trade volume of $27.17 million. The company’s total volume last year was $32.75 million.
S.I. Goldman Co. merged with Comfort Systems at the end of April, but will retain its name.
“We are very pleased to have closed this deal quickly so we can concentrate on exploring ways to build on the strong foundation S.I. Goldman Co. has created,” said Ronald Burkett, president and CEO of S.I. Goldman. Co. Burkett has managed the daily operations at the mechanical contractor for the last 18 years.
S.I. Goldman, which employs more than 300 people in its headquarters in Longwood, Fla., faces no immediate changes in personnel. Burkett said he expects the company to acquire a service company in the near future to round out the services offered.
Another round of acquisitions was also announced by American Residential Services (ARS), which said it closed five transactions with annualized revenues totaling approximately $32 million. The latest acquisitions place ARS in Las Vegas, Nev., and Raleigh, N.C. Terms of the acquisitions were not disclosed.
American Mechanical Services (AMS), a subsidiary of ARS, gained market share in Baltimore, Washington, D.C., Northern Virginia and Colorado Springs.
“These five acquisitions increase our revenue to almost half a billion dollars,” said Gordon Timmons, chief operating officer of ARS.
Timmons said the recent acquisitions will strengthen his company’s presence.
In other financial news developments, first quarter results in 1998 exceeded expectations for Group Maintenance America Corp. (GroupMAC), according to a report from the company. GroupMAC reported its revenue increased 45.7 percent to $107.10 million for the quarter ended March 31, 1998.
“Our companies once again exceeded our internal performance goals for the quarter despite the lingering effects of El Niño weather pattern across the country,” said J. Patrick Millinor Jr., chief executive officer of GroupMAC. “While the wet and mild conditions persisted throughout the first quarter in most areas of the country, our strategy of diversification continued to prove its value.”
Millinor said his company plans to acquire more than $150 million in annual revenue before the end of 1998. GroupMAC also plans to increase the maintenance, repair and replacement component of its revenue base.
Service Experts announced that it finalized commitments for the private placement of $50 million Senior Unsecured Notes. The new structure expands the company’s capability to expand and continue and aggressive growth strategy.
“We are pleased to secure this long-term debt at an attractive rate,” said Alan Sielbeck, Service Experts’ chairman of the board. “In addition, our use of fixed-rate financing should benefit our shareholders as we continue our industry consolidation.”