Leading facilities services contractor ABM Industries Inc., San Francisco, reached a $365 million dollar agreement to acquire OneSource Services Inc., Concord, Mass., an outsourced facility services company with over 10,000 accounts in the United States.

“We saw an opportunity to accelerate our growth strategy and we seized it,” says Henrik Slipsager, ABM president and CEO. “Consistent with our long-held commitment to increasing shareholder value, the acquisition of OneSource complements our strategy and further strengthens our growth prospects.”

ABM expects to operate the combined company with annual run-rate cost synergies of between $45 and $50 million, which are expected to be fully implemented within 12 months of closing. The synergies were jointly identified by the two companies and will be acheived through reduction in duplicate positions and back office functions, the consolidation of facilities, and elimination of professional fees and other services.

Following completion of the transaction, the combined company will operate under the ABM name.

“ABM shares our commitment to world-class facilities services and customer satisfaction, and I am proud that OneSource, which has some of the best people in the business, will play an integral role in making ABM even more competitive in an increasingly globalized market,” says Lord Ashcroft KCMG, OneSource’s chairman in a news release.

New Service Tax In Michigan

The Michigan State Legislature passed a bill that would place a six percent sales tax on janitorial services.

“We are lumped in with astrologers, palm readers and tanning beds,” says Adam Seccombe, owner of Adam’s Cleaning Services, Dearborn, Mich. “The goal that I am trying to get everyone to understand is that this is not a luxury tax. This is a business we are running. Forty percent of my residential customers are not luxury-related jobs. They are 85-year-old people who cannot clean their house.”

BSCs are worried that the tax will force some of their customers to handle their janitorial work internally.

“If I add the six percent tax to my bigger accounts I am afraid they are going to turn around and do all of their cleaning in house,” says Seccombe. “At some of the doctors offices that I have accounts with I’m afraid they are going to pass it off to the nurses.”

The decision to tax janitorial services has led to confusion for some as to what jobs are going to be taxed since services are broken down into supplies and different cleaning procedures.

“We need to know how to implement things,” says Marge Jonesku, office and financial manager of Distinctive Maintenance in Livonia, Mich.

“Is the tax going to be on all services? Are they charging us or do we charge the customer? We need to know what is being taxed and what isn’t. Not having anything explained is the most frustrating part of the bill.”

Mark Klein, chairman of government affairs for the Building Services Contractors Association International and VP of sales for Sunshine Cleaning Systems Inc., Ft. Lauderdale, Fla., recommends BSCs write letters to their customers explaining why they are being taxed. This will help to alleviate confusion customers may have.

“At that point the customer knows there is not a lot that they can do,” says Klein. “They can either cut the service or pay the tax.”

Sunshine Cleaning Systems had to address a similar problem when Florida implemented a janitorial service tax several years ago.

The effective date of the tax is December 1, but it is not certain to go through. A group of Michigan Republicans are looking to repeal it.

newsbriefs

A federal judge ordered a delay on the Bush administration’s plan to curtail illegal immigration.

The decision erased problems for employers such as building service contractors that could have lead to the unjust firing of many legally authorized workers.

The plan relied on Social Security records filled with errors that could have resulted in the firing of hundreds of thousands of citizens and legal residences according to Lucas Guttentag, chief immigration lawyer for the American Civil Liberties Union.

Three cleaning services have been awarded Green Seal’s GS-42 certification, the environmental standard for green cleaning services.

CleanPower of Milwaukee, CJ Maintenance of Columbia, Md., and the ABM Janitorial Services at the Seattle-Tacoma International Airport were awarded the certification as the first three certified Green Cleaning Services.

USI Mid Atlantic, Norfolk, Va., appointed John E. Sames president of the D.C. Metro Office. Former president Priscilla G. Hottle retired after 30 years in the industry.




POSTED ON: 11/1/2007