GroupMAC, Building One form merger
The combined company will take advantage of GroupMAC’s market penetration in the mechanical services segment and Building One’s electrical and janitorial services capabilities, also increasing immediate cross marketing and service bundling opportunities.
“Our combined strengths in hvac, electrical, process piping, controls, voice and data, and other high-tech applications means the combined company will be a major participant in the accelerating trend in upgrading America’s buildings and infrastructure and in the ongoing servicing of these essential systems,” said J. Patrick Milnor, GroupMAC ceo.
Building One, which provides products and services for routine building operation and maintenance, has annualized revenues of approximately $1.8 billion. GroupMAC, provider of mechanical and electrical services to commercial, industrial, and residential customers, currently has 110 locations in 28 states with annual revenues of approximately $1.5 billion.
The combined company will now have the following impact:
- 250 operating locations in 34 states;
- At least one service offering in all of the top 100 U.S. cities;
- Mechanical and electrical services in 87 of the top 100 U.S. cities;
- Mechanical, electrical, and janitorial services in 43 of the top 100 U.S. cities; and
- Over 27,000 employees.
Concurrent to the closing of the merger, an affiliate of Apollo Management IV, L.P., a private investment firm, will exchange its Building One convertible debt and $150 million in cash for approximately $225 million of GroupMAC convertible preferred stock. The cash proceeds from the investment will be used to fund the cash election option for up to approximately 11 million shares of GroupMAC common stock in the merger.
“With a solid financial partner like Apollo, the strategic possibilities for the combined company are broadened,” said Milnor.
“It’s a win-win for the customers, employees, and shareholders of both companies.”
Bob Munson, president of Trinity Contractors, Inc./GroupMAC, Grand Prairie, TX, thinks the merger is great and will create a lot of opportunities for contractors.
“I think it will go a long way to growing the top line and the bottom line,” he said.
“One thing it does is it puts us together with Walker Engineering [Dallas-area Building One contractor with $124 million in revenues]. They can take us along with them on projects and we can supplement them in areas where we have the expertise.
“The merger is going to fill in our national presence.”