ABM Industries Inc.
(ABM - Analyst Report
) announced that Charlotte, N.C., and Tempe, Arizona branches of ABM Landscape Services will be renamed OneSource Landscape & Golf Services, Inc., effective November 1.
The company said that both the branches will continue to provide a range of commercial landscape management and maintenance service to municipalities, sports organizations, resorts, theme parks and other clients.
ABM acquired OneSource Services Inc. (primarily a Janitorial Landscape company) in November 2007. Management stated that with the company’s organic growth struggling to grow above 4% and takeover prices much cheaper than in August 2007, it had decided to increase growth through acquisitions.
The Janitorial segment’s FY08 sales grew by a robust 53.7% to $2,492.3 million due to the $817.5 million contribution from the OneSource acquisition. Excluding the impact of OneSource, the segment’s sales were up just 3% during the period.
Also, the OneSource acquisition provides several cost synergy opportunities such as a reduction in duplicative positions and back office functions, the consolidation of facilities, and the elimination of professional fees. The integration of OneSource generated over $30 million in cost-saving synergies in FY08, which was above the ABM target of $28 million.
The company expects to realize integration synergies of $45-$50 million in 2009, before giving effect to the costs to achieve these synergies. ABM is a leading facility service provider in U.S. The company’s strategy entails growth through acquisitions as well as through internal means.
Strategic acquisitions on a regular basis have played a major role in driving sales increases in ABM’s Janitorial, Security as well as Parking business units. The company continues to look for opportunities to further expand its customer base and enter into new markets through acquisitions.