GDI Integrated Facility Services Buys IH Services

GDI Integrated Facility Services (TSE: GDI) announced Tuesday that its U.S. subsidiary, GDI Integrated Facility Services USA has completed the acquisition of IH Services and its affiliates effective December 31, 2021.

GDI is an integrated leader in providing commercial services to buildings.

One of the Largest Southeast Facility Services Providers

Founded in 1955 and headquartered in Greenville, South Carolina, IH is one of the largest and most respected providers of commercial cleaning services in the Southeastern United States.

With nearly 8,000 employees, IH generated annual sales of approximately $200 million during the 12-month period ending August 30, 2021.

Management Commentary

GDI President & CEO Claude Bigras said, “IH is a leader in the industry in the Southeastern USA and has operations spanning 29 states servicing predominantly the industrial, distribution and healthcare markets. IH is led by a strong and seasoned management team who will continue to operate the business and will become GDI’s regional leadership team covering the U.S. Southeast. The acquisition of IH represents a meaningful expansion of GDI’s U.S. business, significantly expanding our U.S. janitorial operations and geographic footprint.

“The purchase price multiple was within our customary range for large acquisitions, and we expect IH’s normalized adjusted EBITDA margin to be in-line with GDI’s long term margin objectives as best practices are shared and operating efficiencies are realized.”

Wall Street’s Take

On December 3, National Bank Financial analyst Zachary Evershed reiterated a Buy rating on GDI and raised its price target to C$67.50 (from C$66). This implies 29.3% upside potential.

Overall, GDI scores a Moderate Buy analyst consensus rating based on two Buys and two Holds. The average GDI Integrated price target of C$64.88 implies 24.1% upside potential to current levels.

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