MEMPHIS, Tenn. — ServiceMaster announced today that Nik Varty has stepped down as CEO and board member to pursue other opportunities. Varty will continue to assist ServiceMaster’s management team and board of directors in an advisory role to ensure a smooth transition.
Replacing Varty is Naren Gursahaney, current chairman of the board, who has been named as interim chief executive 0fficer of ServiceMaster.
“Over the past two years, Nik has helped drive shareholder value creation through the successful spinoff of American Home Shield and the transformation of ServiceMaster’s core Terminix business," Gursahaney stated in a press release. "With the company moving toward becoming a more focused, pure-play organization, Nik felt it was the right time to step down. The board thanks Nik for his leadership and commitment to working to ensure a smooth transition.”
Gursahaney has served on the ServiceMaster Board of Directors since 2017. He was appointed non-executive chairman on May 1, 2019, and was previously president and CEO of The ADT Corporation.
ServiceMaster also announced it will explore strategic alternatives for its ServiceMaster Brands business, including a potential sale of the segment.
Our continued focus on maximizing shareholder value has led us to the decision to explore strategic alternatives for our ServiceMaster Brands segment,” said Gursahaney. “Following a thorough review of our portfolio of businesses and the current strong valuations for businesses like ServiceMaster Brands, we determined the timing is right to explore strategic alternatives. We believe ServiceMaster shareholders would benefit from our Terminix business becoming a pure-play, global pest control company with enhanced management focus and resources. We expect that proceeds arising from a possible transaction would be used for debt reduction, prudent strategic growth opportunities and shareholder returns. At the same time, we will continue to advance our commitment to predictable, sustainable growth and profitability at Terminix through continued execution of the cultural and operational transformation of the business that is underway.”
Gursahaney added, “ServiceMaster Brands is a leading player in the large and growing restoration and cleaning services industries. With its strong market position, trusted brand names, and refreshed strategy led by an experienced management team, ServiceMaster Brands is well-positioned to increase market share and further develop its strong growth prospects.”
The ServiceMaster Brands segment provides residential and commercial services primarily through franchised operations. The strong and recognizable brands in the segment include ServiceMaster Restore, ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec. In the twelve-month period ending September 30, 2019, the segment reported $252 million in revenue, $2,712 million in customer level revenue and $91 million in Adjusted EBITDA.
No final decision has been made about any strategic alternatives, and there can be no assurances that our review of strategic alternatives will ultimately lead to a transaction. ServiceMaster does not intend to provide any further comment on the process until its Board of Directors has concluded the review and approved a specific outcome or otherwise determines that further disclosure is appropriate.
ServiceMaster has engaged Lazard as financial advisor and Wachtell, Lipton, Rosen & Katz as legal advisor in connection with its exploration of strategic alternatives for the ServiceMaster Brands business.
