Aramark Buys ServiceMaster Unit
The company also said it plans to close nonstrategic and unprofitable businesses -- TruGreen LandCare Construction and Certified Systems Inc. -- resulting in a fourth-quarter restructuring charge of $300 million to $365 million. TruGreen had revenues of approximately $168 million in 2000 and approximately 2,500 employees. CSI employs 100 people and provides out-sourced human resources support to 10,000 people. It reported 2000 revenues of approximately $300 million.
ServiceMaster Management Services had revenues of $1.9 billion in 2000, but lacked sufficient scale to increase profits, according to Barrington Research analyst Alexander Paris Jr. Aramark has the size to get more out of the management Services business, Paris noted.
ServiceMaster said it will use the after-tax proceeds from the sale of about $600 million to pay down debt. It expects to report an after-tax accounting gain of about $385 million.