SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20547
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): January 4, 1999
THE SERVICEMASTER COMPANY
(Exact name of registrant as specified in its certificate)
Commission File Number: 1-14762
Delaware One ServiceMaster Way 36-3858106
Downers Grove, IL 60515
(State or other jurisdiction (Address of I.R.S. Employer
of incorporation or organization) executive office) Identification No.)
Registrant's telephone number, including area code: (630) 271-1300
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Item 5. Other Events
Issuance of News Release Regarding the Sale of ServiceMaster Energy
Management and the Execution of a Letter of Intent in respect of the Sale and
Discontinuance of Certain Components of ServiceMaster Home Health Care Services,
Inc.
Through a news release dated January 4, 1999, The ServiceMaster Company, a
Delaware corporation (the "Company"), announced the sale of ServiceMaster Energy
Management, a division of ServiceMaster Management Services L.P., the execution
of a letter of intent for the sale of the direct operations of its home health
care agencies and certain support operations; and the discontinuance of its
outsourced operation of home health care agencies. The Company will continue to
provide consulting service to hospitals and other providers of home health care.
A copy of this news release is attached to this Form 8-K as Exhibit 1.
Item 7. Financial Statements and Exhibits
Financial Statements:
none
Exhibits:
1. News Release dated January 4, 1998
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE SERVICEMASTER COMPANY
(Registrant)
By: /s/ Vernon T. Squires
Sr. Vice President and General Counsel
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Exhibit 1 of Form 8-K
For further information contact:
Claire Buchan, VP Comm, (630)271-2150
Bruce Duncan, VP IR, (630)271-2187
Steve Preston, CFO, (630)271-2637
FOR IMMEDIATE RELEASE
January 4, 1999
SERVICEMASTER MAKES CHANGES IN TWO OF ITS SMALLER
BUSINESS UNITS, ENERGY MANAGEMENT AND HOME HEALTH CARE
DOWNERS GROVE, Illinois -- ServiceMaster (NYSE:SVM) announced today that it
has formed a strategic venture with Texas Utilities Company (NYSE:TXU) for the
ownership and operation of its energy management business. The new venture has
acquired all the assets of ServiceMaster Energy Management and will be owned 85
percent by Texas Utilities and 15 percent by ServiceMaster. This new business
combination will provide ServiceMaster an expanded ability to provide
comprehensive energy solutions to customers.
"With the deregulation of public energy utilities, our customers are
seeking total energy management solutions on local, regional and global bases.
Both companies will benefit from this transaction. Texas Utilities' ability to
serve as an energy source, combined with their aggressive and innovative
approach to the industry, will create a partnership that will enable us to
provide our customers with end-to-end energy management solutions,"
ServiceMaster President and Chief Executive Officer Carlos Cantu said.
Texas Utilities is a $6 billion electric and gas utility, serving the North
Texas area. ServiceMaster and TU subsidiary, Texas Utilities Integrated
Solutions, will provide bundled services to give customers access to an energy
source through Texas Utilities and to the energy management expertise of
ServiceMaster.
ServiceMaster has also completed the strategic review of its home health
care business and has concluded that without significant investment to make home
health care one of its core businesses, it cannot profitably provide high
quality service in the future and continue to satisfy all the changes and the
requirements of new governmental reimbursement programs. The Company has signed
a letter of intent to sell its direct operations of home health care agencies
and certain support operations to a major provider of home health care.
ServiceMaster expects to close the transaction by the end of January 1999. In
addition, the Company will discontinue its outsourced operation of home health
care agencies, but will continue to provide consulting service to hospitals and
other providers of home health care.
"ServiceMaster is committed to an orderly transition of these businesses to
ensure continuity for our customers and employees," said Cantu.
The Energy Management transaction will result in a pre-tax gain of $37
million, which is expected to be offset by charges relating primarily to home
health care, including the impairment of intangible assets and costs relating to
exiting customer arrangements. The Company expects the cash impact of the
charges to be $5-6 million in 1999, with the remainder of the charges being
primarily noncash.
ServiceMaster serves more than 9 million customers in the United States and
in 38 countries around the world, with annual customer level revenue exceeding
$5.6 billion. ServiceMaster is a network of quality service companies with two
major operating segments, ServiceMaster Consumer Services and ServiceMaster
Management Services.
ServiceMaster Consumer Services now includes eight market-leading
companies-- TruGreen-ChemLawn, Terminix, American Home Shield, Rescue Rooter,
ServiceMaster Residential and Commercial Services, Merry Maids, AmeriSpec and
Furniture Medic-- which operate through the ServiceMaster Quality Service
Network of approximately 5,800 U.S. Company-owned locations and franchised
businesses.
ServiceMaster Management Services is the leading facilities management
company serving health care, education, and business and industrial facilities
with management of plant operations and maintenance, housekeeping, clinical
equipment maintenance, food service, laundry, grounds and energy.
In accordance with the Private Securities Litigation Reform Act of 1995,
the Company notes that statements that look forward in time, which include
everything other than historical information, involve risks and uncertainties
that may affect the Company's actual results of operations. Factors which could
cause actual results to differ materially include the following (among others):
weather conditions adverse to certain of the Company's Consumer Services
businesses, the entry of additional competitors in any of the markets served by
the Company, labor shortages, consolidation of hospitals in the healthcare
market, the condition of the U.S. economy, the inability of key suppliers to
achieve timely Y2K compliance in their delivery systems or the inability of the
Company to make its own systems Y2K compliant, and other factors listed from
time to time in the Company's filings with the Securities and Exchange
Commission.
