ServiceMaster Global Holdings shares rallied to a new record high after resuming trade on Wednesday morning after the company said it plans to spin-off its American Home Shield business from its Terminix and Franchise Services Group businesses.American Home Shield provides home warranties covering the repair and replacement of home systems, components and appliances. The business had revenues of $1.02 billion in 2016.
The transaction is expected to be completed in Q3. The company also appointed Nikhil Varty as its new CEO, succeeding Rob Gillette. Varty most recently served as president of Americas and global vice president of mergers and acquisition for Wabco (WBC). The company also said it expects to report an 8% increase in Q2 revenues to $807 million, and net income of $0.63 per share compared to EPS of $0.11 in the year ago period. The Street consensus calls for earnings of $0.66 per share on revenues of $794.0 million.