The acquirer may be a utility, an hvac manufacturer, or a mass retailer like Home Depot. In recent weeks, one rumored buyer was a major hvacr manufacturer, but the company has denied such reports.
The Service Experts development follows last week’s announcement that the publicly traded company would miss by 50% its projected quarterly earnings of 44 cents per diluted share, earning instead in the range of 23 to 28 cents. In response, the price dropped 38% to $12.63 a share in one day, where it remained last week.
Chairman Alan R. Sielbeck blamed bad weather, a fall-off in the company’s light commercial business (30% of its volume), and unexpected expenses in combining hubs (service centers) in three locations.
“Part of the reason was uncooperative weather, some was self-inflicted,” said Sielbeck.
The company also said its financial advisors have had “preliminary discussions with several potential acquirers.”
Nashville-based Service Experts went public on Aug. 16, 1996, opening at $13 a share. One year ago, it reached a high of $38 a share. In mid-February the shares dropped when the company cited warm weather for cooling its 1999 earnings.
During its life, the company has completed an aggressive roll-up of contractors. It now has 116 service centers in 36 states, focusing mainly on residential replacement and service work.
Each quarter the company acquired from 12 to 34 dealers in a cash-and-equity transaction. The company announced in April the acquisition of 31 dealers representing $48.8 million in combined sales.