APi Group boosts outlook after $570 million acquisition By Investing.com

NEW BRIGHTON, Minn. – APi Group Corporation (NYSE: APG), a global business services provider, has successfully completed the acquisition of Elevated Facility Services Group from L Squared Capital Partners for approximately $570 million. The transaction, which was formally announced today, is expected to significantly enhance APi’s service offerings in the elevator and escalator sector.

Elevated Facility Services Group, based in Tampa, Florida, is recognized for its contractual services across major elevator and escalator brands, contributing an estimated $220 million in annual revenue with a 20% adjusted EBITDA margin. The addition of Elevated’s 600 employees expands APi’s operational footprint to over 18 states.

APi’s President and CEO, Russ Becker, expressed enthusiasm for the integration, highlighting the strategic move into the $10+ billion U.S. elevator and escalator services market. Becker anticipates a “long runway of opportunity” for organic growth and acquisitions, bolstering the company’s financial profile.

The acquisition aligns with APi’s strategic shift towards generating 60% of revenues from inspection, service, and monitoring, enhancing its life safety services portfolio. APi has also updated its full-year guidance, reflecting increased confidence in the company’s financial trajectory.

For the full year 2024, APi now anticipates net revenues to range between $7,150 and $7,350 million, a rise from the previous forecast of $7,050 to $7,250 million. Adjusted EBITDA expectations have also been raised to $875 to $925 million, up from $855 to $905 million.

The adjusted free cash flow conversion remains steady at approximately 70%. Furthermore, the company has reduced its full-year 2024 interest expense forecast from $150 million to $145 million, while maintaining prior projections for depreciation, capital expenditures, tax rate, and weighted average share count.

APi Group’s portfolio encompasses fire and life safety, security, elevator and escalator, and specialty services, with a substantial recurring revenue base and a presence in over 500 locations worldwide. The company prides itself on a culture of innovation and entrepreneurial leadership, providing a broad array of mandated and contracted services to a diverse customer base.

This news release is based on a press release statement from APi Group Corporation and contains forward-looking statements subject to risks and uncertainties. Investors are advised that actual results may differ materially due to various factors, as detailed in APi’s filings with the Securities and Exchange Commission.

In other recent news, APi Group Corporation has released its first quarter 2024 financial results, displaying steady performance with net revenues consistent with the same period last year. The company reported a 3% organic growth in service revenues and a significant increase in core inspection revenues in its Life Safety business.

APi Group’s adjusted EBITDA margin reached a record 10.9% for the first quarter. The company also announced the acquisition of Elevated Facilities Services Group for $570 million, a strategic move anticipated to add $220 million in annualized revenues and enhance adjusted EBITDA margins by approximately 20%.

APi Group has repurchased half of the conversion shares from Blackstone (NYSE:) and Viking Global Equities and launched a secondary public offering and a follow-on offering. The company’s M&A strategy is centered on the elevator and escalator space, with plans for organic growth and cross-selling opportunities. The company expects to achieve a 70% adjusted free cash flow conversion target for the year and aims to reduce its net leverage ratio to around 2.5x by the end of 2024.

APi Group is optimistic about its core safety markets, including data centers and the semiconductor space. The company anticipates organic growth to continue at a high single-digit rate, with potential for additional non-organic growth through cross-selling opportunities with the recent acquisition of Elevated Facilities Services Group. These are recent developments in the company’s business strategy and financial performance.

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