What We’re Reading

ISS Strategy Update

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ISS, a leading global provider of facility services, announced its ambition to increase organic growth to 4-6% per annum by accelerating its transition towards Key Account customers. A two-year program of expedited investment, encompassing services (e.g. workplace, technical, and catering) and platform (e.g. technology, data, and innovation), will materially enhance ISS’s delivery capabilities.  Investment will include project-related operating expenditure, capital expenditure and selected M&A. Capital will be reallocated from areas that are not core to the Key Account strategy to help fund this transformation.

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US Ecology Acquires Ecoserv Industrial Disposal

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US Ecology announced the acquisition of Ecoserv Industrial Disposal, a wholly owned subsidiary of Ecoserv, and a leading provider of non-hazardous industrial wastewater disposal solutions in the Gulf Coast. "This acquisition adds unique, high volume industrial liquids disposal capabilities, complements other investments we've made in the region, and strengthens our comprehensive environmental services offerings," commented Jeff Feeler, US Ecology's Chairman, President and Chief Executive Officer.

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Sodexo Acquires Alliance in Partnership

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Sodexo announces the acquisition of the Alliance in Partnership (AiP) group of companies, a specialist education caterer in the UK which includes The Contract Dining Company and Class Catering Services. By joining forces, Sodexo and AiP will combine their resources and expertise to deliver innovative food concepts which help improve health and learning outcomes for students across the UK. Andrew Wilkinson, CEO Schools and Universities, Sodexo UK & Ireland said: "We are delighted to welcome the talented and dynamic AiP team to Sodexo. AiP’s impressive client base of 418 schools will strongly complement our existing private sector schools business.”

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What We’re Hearing

Excerpts from Recent Earnings Calls

picture1_57.png“…On the acquisition front, we deployed just over $9 million towards a handful of tuck-under acquisitions during the third quarter. Our transaction flow this year has been relatively active in a very competitive M&A environment. For the nine months year-to-date, we've allocated a total of $53 million of capital towards 10 transactions, approaching $70 million in aggregate annualized revenue....”

“…We continue to have a pretty robust pipeline. They are smaller in nature, tuck-in variety. The M&A market is a very difficult market, and we certainly look into larger opportunities. If you see our balance sheet, we have the capability to lever up and do a larger deal. It just has to be the right deal. But we've got 10 active discussions in our pipeline. So, it's always pretty robust. We've got a good feed or network of people, when you have 90 locations, they identify our opportunities. We've got a dedicated resource that's out there, meeting with those potential targets, and it continues to generate nice opportunities.…”

Public Comparables - Market Performance

Public Comparables 5-year price index (’13-’18)*

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Public Comparables TEV/LTM EBITDA (’13-’18)*

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* As of  November 30, 2018.

Public Comparables - Index

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Information included in this industry update was sourced from Factset.

 

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