ORLANDO, Fla. — Harvey L. Massey, chairman and CEO of Massey Services, announced the company has reached a definitive agreement to purchase Sunair Services Corporation including its subsidiary, Middleton Lawn & Pest Control. Massey Services is a privately held company.
According to a press release from Sunair Services, the agreement is pursuant to Massey acquiring all of the outstanding common stock of Sunair in an all-cash transaction valued at $2.75 per share, which represents a premium of approximately 47% over the stock's closing price on Sept. 25.
However, the $36 million takeover was at a price 8.3% below what a failed deal earlier this year called for, according to the Wall Street Journal. Sunair shareholders will get $2.75 each, which is below the $3 offering Massey Services made earlier this year but subsequently withdrew, the WSJ reports. After a deal failed to materialize, a group of shareholders complained about the board opting to back Chairman Richard Rochon's “personal interests not to sell” the company and sought to replace six of the seven members.
Assuming the deal receives FCC approval, Middleton’s operations will integrate with those of Massey Services.
“The addition of Middleton’s employees and customer base in both the pest and lawn segments will move our company to a new level in our industry,” said Harvey Massey. “They’ve been an outstanding competitor over the years and have some great people. The integration of their team members and customers into our service system will have a powerful and positive impact on our operations.”
Before the acquisition, Massey Services had approximately 800 team members, 700 vehicles and just under 200,000 customers, being serviced out of 61 service centers throughout Florida, Georgia and Louisiana. Middleton has 26 service centers, all in Florida.
With revenues of $22.1million in 2008, Massey Services was ranked 59th on the Lawn & Landscape Top 150 list.
“Our operations overlap in many markets where we compete head to head,” said Harvey Massey. “Over the next 60 to 90 days, we’ll finalize all of the administrative and operational issues before us. We plan to begin 2010 as a deeper and stronger company, but with the same emphasis we’ve always had on operational excellence and providing total customer satisfaction.”
Spokesperson Bud Brewer said that Massey Services should benefit from the combined resources. “Over the years there has been a very healthy competition between the two of us, and that competition has made both of us better. I’ve been bullish on this acquisition for some time. I told Mr. Massey that if there is one big whale we could get, this would be the one.”
In the Sunair press release, Chairman Richard C. Rochon said that “Sunair's board of directors has concluded a lengthy evaluation of numerous strategic alternatives to enhance shareholder value and has concluded that joining forces with Massey is in the best interests of our shareholders.”
The transaction is expected to close in November subject to the approval of Sunair's shareholders, customary regulatory approvals and other closing conditions. Following the closing, Harvey Massey will be the Chairman and CEO of the combined companies. Massey is a shareholder of Sunair and owns approximately 9.63% of Sunair's common stock.
Hyde Park Capital is acting as Sunair's financil adviser, Akerman Senterfitt is acting as Sunair's legal counsel and Shuffield Lowman is acting as Massey's legal counsel.
