APi Group Enters New, Adjacent Service Market with Acquisition of Elevated Facility Services Group

APi Group Corporation (NYSE: APG) (“APi” or the “Company”) today announced that it has entered into a definitive agreement to acquire Elevated Facility Services Group (“Elevated”), a premier provider of contractually based services for all major brands of elevator and escalator equipment. Elevated will be acquired by APi from a fund managed by L Squared Capital Partners for approximately $570 million in cash, subject to working capital and other standard adjustments.

The transaction will expand APi’s position as a premier provider of safety services focused on non-discretionary, regulatory driven applications. Elevated’s focus on the elevator and escalator services space complements APi’s existing capabilities in life safety, fire protection and security, expanding APi’s total addressable market by approximately $10 billion and creating a long-term cross-selling opportunity. The majority of Elevated’s net revenues come from non-discretionary services – inspections, service, and repair– strengthening APi’s service offering and allowing the business to drive strong financial results and free cash flow in variable macroeconomic environments.

Elevated has many of the same attractive characteristics as APi, including scale in a highly fragmented market, regulatorily driven demand, a loyal customer base, an experienced leadership team, a highly skilled workforce, and an unwavering focus on culture and developing its teammates throughout the organization. Elevated will also provide APi a platform from which to expand its bolt-on M&A strategy in the fragmented elevator and escalator services space.

The acquisition is expected to contribute ~$220 million in annual revenue and to be accretive to APi’s “13/60/80” shareholder value creation framework driven by Elevated’s strong EBITDA margin profile, ~70% of revenue from inspections, service and repair, and an asset light business model driving strong adjusted free cash flow conversion. Following the transaction, the Company intends to stay aligned with its long-term net leverage target of less than 2.5x and continues to see an attractive market to grow through acquisitions.

Russ Becker, APi’s President and Chief Executive Officer stated: “We have long viewed the elevator and escalator service market as very attractive due to highly recurring nature of the business, driven by non-discretionary, statutorily driven demand. We believe Elevated is the perfect opportunity for APi to expand into this adjacent and attractive market, creating a platform from which to execute our bolt-on M&A strategy. I believe our strength in operating a branch-led operating model makes APi the perfect owner for Elevated and businesses like it.”