| Group Maintenance America Corp. | |||
| Ticker: | MAK | 1800 West Loop South, Suite 1375 | |
| Exchange: | New York Stock Exchange | Houston, TX 77027 | |
| Industry: | Construction (SIC Code 1711) | (713) 626-4778 | |
| # of Employees: | 2860 | ||
| Type of Shares: | Common Shares | Filing Date: | 8/21/97 | |
| U.S. Shares: | 7,500,000 | Offer Date: | 11/6/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $14.00 - $16.00 | |
| Primary Shares: | 7,500,000 | Offer Price: | $14.00 | |
| Secondary Shares: | 0 | Gross Spread: | $0.98 | |
| Offering Amount: | $112,500,000 | Selling: | $0.55 | |
| Expenses: | $4,000,000 | Reallowance: | $0.10 | |
| Shares Out After: | 19,466,850 |
| Manager | Tier | Phone |
| Robinson-Humphrey Company, Inc., The | Lead Manager | (404) 266-6450 |
| ABN AMRO Bank | Co-manager | |
| William Blair & Company | Co-manager | (312) 364-8990 |
| Issuer's Law Firm: | Bracewell & Patterson |
| Bank's Law Firm: | King & Spalding |
| Auditor: | KPMG Peat Marwick |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $307.51 | $157.94 | $151.40 | Assets: | $64.64 |
| Net Income: | $12.07 | $5.28 | $4.92 | Curr Assets: | |
| EPS: | $0.61 | $0.27 | $0.25 | Liabilities: | $58.82 |
| Prior EPS: | Curr Liabilities: | ||||
| Cash Flow/Oper: | Equity: | $5.83 | |||
| Cash Flow/Fin: | Cash: | $5.88 | |||
| Cash Flow/Inv: | Working Cap: | $7.42 | |||
| Business Description |
| The company was founded to create the leading nationwide provider of heating, ventilation and air conditioning, plumbing and electrical services to residential and commercial customers. Since inception, the Company has acquired 11 companies (the "Pre-Offering Companies") totaling $138.8 million in combined 1996 revenues and has definitive agreements to acquire an additional 13 companies (the "Offering Acquisition Companies") upon the closing of the Offering. After the Offering, the Company believes it will be one of the largest diversified providers of HVAC, plumbing and electrical services in the United States with operations in 37 cities in 21 states. The market for these diversified services is approximately $100 billion. The Company's pro forma 1996 revenues and income from operations were $307.5 million and $20.9 million, respectively, and combined historical revenues of the GroupMAC Companies grew at an annual rate of 14.3% from 1994 through 1996. The Company offers a comprehensive range of services to residential and commercial customers in both the new installation and the maintenance, repair and replacement segments of the HVAC, plumbing and electrical service industries. The Company's services include installing and maintaining, repairing and replacing central air conditioning systems, furnaces, heat pumps and plumbing and electrical systems. |
| Competition |
| The market for HVAC, plumbing and electrical services is highly competitive. The Company believes that the principal competitive factors in the residential and commercial services industry are (i) timeliness, reliability and quality of services provided, (ii) range of services offered, (iii) market share and visibility and (iv) price. The Company believes its strategy of creating a leading national provider of comprehensive services directly addresses these factors. The ability of the Company to employ, train and retain highly motivated service technicians to provide quality services should be enhanced by its ability to utilize professionally managed recruiting and training programs. In addition, the Company expects to offer compensation, health and savings benefits that are more comprehensive than most offered in the industry, including a stock option plan for all employees that is unique to this industry. Service quality should be enhanced by the implementation and continuous reinforcement of best practices across the GroupMAC Companies. Competitive pricing is possible through purchasing economies and other cost saving opportunities that exist across each of the service lines offered and from productivity improvements. Most of the Company's competitors are small, owner-operated companies that typically operate in a single market. Certain of these smaller competitors may have lower overhead cost structures and may be able to provide their services at lower rates. Moreover, many homeowners have traditionally relied on individual persons or small repair service firms with whom they have long-established relationships for a variety of home repairs. There is currently a limited number of public companies focused on providing residential or commercial services in some of the same service lines provided by the Company. In addition, there are a number of national retail chains that sell a variety of plumbing fixtures and equipment, and HVAC equipment for residential use and offer, either directly or through various subcontractors, installation, warranty and repair services. Other companies or trade groups engage in franchising their names and marketing programs in some service lines. In the future, competition may be encountered from, among others, HVAC equipment manufacturers, the unregulated business segments of regulated gas and electric utilities or from newly deregulated utilities entering into various residential service areas. Certain of the Company's competitors and potential competitors have greater financial resources than the Company to finance residential services acquisition and development opportunities, to pay higher prices for the same opportunities or to develop and support their own residential services operations if they decide to enter the field. |
| Business Plan |
| The goal of the company's operating strategy is to increase the revenues and profitability of the GroupMAC Companies and subsequently acquired businesses, while maintaining the highest level of service to its customers. The key elements of the company's operating strategy are as follows: (I) Achieve Operating Efficiencies, (ii) Operate On A Decentralized Basis, (iii) Attract, Develop And Retain High Quality Technicians and (iv) Establish National Market Coverage. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to redeem or repay outstanding warrants, preferred stock and indebtedness used to acquire the Pre-Offering Companies, to fund the cash portion of the Offering Acquisition Companies, to repay indebtedness of the Offering Acquisition Companies and for other general corporate purposes including working capital and future acquisitions. |
| Name of Shareholder | % Owned Before | % Owned After |
| Gordon A. Cain | 25.80% | 12.80% |
| Richard M. Siefring | 10.20% | 5.10% |
| James D. Jennings | 6.80% | 3.40% |
| Profit Sharing Plan | 6.60% | 3.30% |
| Dale M. Wilkerson | 5.50% | 2.70% |
| Officer Name | Title | Age |
| James P. Norris | Chairman of the Board; Director | 58 |
| J. Patrick Millinor, Jr. | Chief Exective Officer; Director | 51 |
| Chester J. Jachimiec | Executive Vice President-Acquisitions; Director | 42 |
| Richard S. Rouse | Executive Vice President-Corporate Development and Administration; Director | 50 |
| Alfred R. Roach, Jr. | Executive Vice President-Marketing, Sales and Product Support | 53 |
| William Michael Callahan | Executive Vice President-Training; Technology and Field Support | 51 |
| James D. Jennings | President and Chief Executive Officer of Airtron; Director | 54 |
| Donald L. Luke | President and Chief Operating Officer; | 60 |
| Darren B. Miller | Senior Vice President and Chief Financial Officer | 37 |
| Timothy Johnston | Senior Vice President of Airtron; Director | 41 |
| Randolph W. Bryant | Senior Vice President, General Counsel and Secretary | 46 |