APi Group Enters New, Adjacent Service Market with Acquisition of Elevated Facility Services Group
-Establishes new statutorily mandated service platform in the highly attractive elevator and escalator services space-
-Accretive to adjusted earnings per share-
-Enhances gross profit margin, adjusted EBITDA margin, adjusted free cash flow and creates opportunities for cross selling-
-Accelerates business mix shift towards 60% of revenues from highly recurring inspection, service, and monitoring services-
-Company provides preliminary first quarter 2024 results-
The transaction will expand APi’s position as a premier provider of safety services focused on non-discretionary, regulatory driven applications. Elevated’s focus on the elevator and escalator services space complements APi’s existing capabilities in life safety, fire protection and security, expanding APi’s total addressable market by approximately
Elevated has many of the same attractive characteristics as APi, including scale in a highly fragmented market, regulatorily driven demand, a loyal customer base, an experienced leadership team, a highly skilled workforce, and an unwavering focus on culture and developing its teammates throughout the organization. Elevated will also provide APi a platform from which to expand its bolt-on M&A strategy in the fragmented elevator and escalator services space.
The acquisition is expected to contribute
Becker continued, “We remain focused on creating sustainable shareholder value by delivering on our '13/60/80' targets and believe the addition of Elevated to the APi family will strengthen our ability to deliver on these targets. Elevated and APi are aligned from a culture, values, and fit perspective. Each business prioritizes investing in its people throughout the organization, including the men and women in the field. Our global team of 29,000 leaders is excited to welcome our new teammates from Elevated to the APi family.”
The transaction is expected to close in the second quarter of 2024, subject to customary closing conditions and regulatory approvals. A presentation with additional detail about Elevated and the transaction can be found on the investor relations section of the Company’s website.
Preliminary, Unaudited First Quarter 2024 Results
For the first quarter 2024, the Company updates its prior guidance provided on
These preliminary results are based on the Company’s current estimate of its results for the first quarter ended
About APi:
APi is a global, market-leading business services provider of life safety, security and specialty services with a substantial recurring revenue base and over 500 locations worldwide. APi provides statutorily mandated and other contracted services to a strong base of long-standing customers across industries. We have a winning leadership culture driven by entrepreneurial business leaders to deliver innovative solutions for our customers. More information can be found at www.apigroupcorp.com.
Non-GAAP Financial Measures
This press release contains a non-
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Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is the measure of profitability used by management to manage its segments and, accordingly, in its segment reporting. The Company supplements the reporting of its consolidated financial information with certain non-
U.S. GAAP financial measures, including EBITDA and adjusted EBITDA, which is defined as EBITDA excluding the impact of certain non-cash and other specifically identified items (“adjusted EBITDA”). Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net revenues. The Company believes these non-U.S. GAAP measures provide meaningful information and help investors understand the Company’s financial results and assess its prospects for future performance. The Company uses EBITDA and adjusted EBITDA to evaluate its performance, both internally and as compared with its peers, because it excludes certain items that may not be indicative of the Company’s core operating results. Consolidated EBITDA is calculated in a manner consistent with segment EBITDA, which is a measure of segment profitability.
While the Company believes this non-
Forward-Looking Statements and Disclaimers
Please note that in this press release the Company may discuss events or results that have not yet occurred or been realized, commonly referred to as forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company. Such discussion and statements may contain words such as “expect,” “anticipate,” “will,” “should,” “believe,” “intend,” “plan,” “estimate,” “predict,” “seek,” “continue,” “pro forma” “outlook,” “may,” “might,” “should,” “can have,” “have,” “likely,” “potential,” “target,” “indicative,” “illustrative,” and variations of such words and similar expressions, and relate in this press release, without limitation, to statements, beliefs, projections and expectations about future events. Such statements are based on the Company’s expectations, intentions and projections regarding the Company’s future performance, anticipated events or trends and other matters that are not historical facts. These statements include (i) the Company’s expectations and beliefs regarding the acquisition of Elevated, including with respect to the Company’s market position, the Company’s long-term strategies and targets, the expected revenue contribution, that the acquisition will be accretive, the expected synergies, and the timing for closing of the acquisition, and (ii) the Company’s preliminary financial results for the first quarter of 2024.
These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including: (i) economic conditions, competition, political risks, and other risks that may affect the Company’s future performance, including the impacts of inflationary pressures and other macroeconomic factors on the Company’s business, markets, supply chain, customers and workforce, on the credit and financial markets, on the alignment of expenses and revenues and on the global economy generally; (ii) the inability of the Company to successfully or timely consummate the acquisition of Elevated; (iii) failure to realize the anticipated benefits of the acquisition of Elevated and its ability to successfully execute the Company’s bolt-on acquisition strategy to acquire other businesses and successfully integrate them into its operations; (iv) changes in applicable laws or regulations; (v) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; and (vi) other risks and uncertainties, including those discussed in the Company’s Annual Report on Form 10-K for the year ended
Preliminary Financial Results
The preliminary financial results presented above for the three months ended
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Investor Relations and Media Inquiries:
Vice President of Investor Relations
Tel: +1 651-240-7252
Email: investorrelations@apigroupinc.us
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