NEW BRIGHTON, Minn. - APi Group Corporation (NYSE: APG), a global service provider in life safety, security, and specialty services, announced today its definitive agreement to acquire Elevated Facility Services Group, a leading service provider for elevator and escalator equipment. The $570 million cash transaction is expected to enhance APi's service offerings and is projected to be accretive to its adjusted earnings per share.
Elevated Facility Services Group, which generates approximately $220 million in annual revenue, primarily from non-discretionary services such as inspections, service, and repair, will complement APi's existing business. This acquisition aligns with APi's strategy to shift its business mix toward services with recurring revenue, aiming for 60% of its revenues to come from such sources.
Russ Becker, President and CEO of APi, expressed that the acquisition is a strategic move into a market driven by regulatory demand with recurring business, which is seen as an attractive quality. He emphasized that both companies share similar values and focus on investing in their people, highlighting the cultural and operational alignment.
The transaction is anticipated to close in the second quarter of 2024, pending customary closing conditions and regulatory approvals. It is expected to contribute to APi's '13/60/80' shareholder value creation framework, reflecting the company's long-term financial targets.
APi also provided preliminary results for the first quarter of 2024, with net revenues expected to range between $1.590 and $1.610 billion, and adjusted EBITDA projected between $172 and $177 million. These preliminary figures suggest an improvement in adjusted free cash flow compared to the previous year, in line with seasonal trends.
The acquisition of Elevated is part of APi's ongoing strategy to grow through acquisitions, and the company continues to pursue opportunities in this space. APi intends to maintain its long-term net leverage target below 2.5 times following the acquisition.
The company's complete financial results for the first quarter of 2024 are expected to be released on May 2, 2024.
This news is based on a press release statement from APi Group Corporation.
InvestingPro Insights
Following APi Group Corporation's announcement of its intention to acquire Elevated Facility Services Group, the market is closely monitoring the company's financial health and growth potential. According to InvestingPro, APi Group has a market capitalization of $10.08 billion USD and has experienced a significant price uptick with a 54.21% six-month total return. This aligns with the company's strategy to enhance its service offerings and grow through acquisitions.
One of the InvestingPro Tips for APi Group is its expectation of net income growth this year, which could be a positive sign for investors looking for companies with potential upside in earnings. Additionally, APi Group has been trading at a high Price / Book multiple of 4.87, as of the last twelve months ending Q4 2023, which may reflect the company's assets valuation in the eyes of the market.
Investors should note that APi Group does not pay dividends, which could be a consideration for those seeking regular income streams from their investments. However, the company has shown a strong return over the last three months, with a 25.58% price total return, which may appeal to growth-focused investors. For more insights, InvestingPro offers a wealth of additional tips, and interested readers can find out more at: https://www.investing.com/pro/APG. There are 14 more InvestingPro Tips available that could help investors make more informed decisions about their investments in APi Group Corporation.
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