On Oct. 1, Memphis, Tenn.-based ServiceMaster Global Holdings, the parent company of Terminix, completed the sale of its ServiceMaster Brands franchise businesses to an affiliate of investment funds managed by Roark Capital Management LLC for $1.553 billion. As Pest Management Professional reported Sept. 2, the company is changing its name to Terminix Global Holdings. Its stock will begin trading Monday, Oct. 5, 2020, under the NYSE ticker symbol TMX, instead of SERV.

“Today marks the beginning of exciting new chapters for both Terminix and ServiceMaster Brands,” CEO Brett Ponton said in a news release. “Terminix is moving ahead with a laser focus on being the preferred pest control company in the industry. We look forward to continuing to build on the progress underway to further enhance the customer experience that will drive consistent, profitable growth. We see tremendous potential to further capitalize on the powerful Terminix brand name, strong service culture, and significant scale to deliver greater value for all our stakeholders. Our talented team is energized and looks forward to forging even stronger connections with our customers and local communities.”

After taxes and fees related to the sale, net proceeds of approximately $1.1 billion will be used to retire approximately $800 million of debt, including a portion of the Term Loan B and all of the existing 2024 high yield bonds. Excess cash to the balance sheet of approximately $300 million will be earmarked for accretive merger and acquisitions (M&A) opportunities, as well as opportunistic shareholder returns under a new $400 million share repurchase authorization.

ServiceMaster CFO Tony DiLucente said in the release, “The transaction will deliver substantial financial benefits, allowing us to right-size our balance sheet below our long-term target net debt ratio of 2.5 to 3 times. Increasing the focus on consistent execution in the Terminix business as a pure-play company will allow us to make faster progress improving the fundamentals of customer service. Those improvements will drive higher customer retention and produce consistent organic growth, profit margin expansion and free cash flow generation. In addition, while we will have ample capacity to pursue strategic M&A opportunities, our focus in the near term will be on bolt-on deals as we work to realize synergies from previous deals closed over the last few years. Under our new $400 million share repurchase authorization, we will have considerable flexibility to be opportunistic as we remain focused on delivering returns for our shareholders.”