November 16, 2015 / 2:15 AM / 2 years ago

Goldman, Thomas H. Lee to acquire Blackstone's GCA Services-sources

Nov 15 (Reuters) - Goldman Sachs Group Inc's private equity arm and buyout firm Thomas H. Lee Partners LP have agreed to acquire facility management company GCA Services Group Inc from Blackstone Group LP, according to people familiar with the matter.

Goldman Sachs and Thomas H. Lee will have an equal participation in a consortium that will acquire GCA, the largest provider of janitors to U.S. public schools, for around $1 billion, including debt, the people said on Sunday.

The sources asked not to be identified because the deal has not yet been officially announced. Blackstone declined to comment, while GCA, Goldman Sachs and Thomas H. Lee did not immediately respond to requests for comment.

The janitorial industry is forecast to grow at an average annual rate of 4.3 percent through 2018, versus U.S. economic growth of close to 3 percent, according to investment bank Scott-Macon Ltd.

Based in Cleveland, Ohio, GCA provides janitors and cleaners to schools, airports, warehouses, power stations, rental car locations and other businesses in the United States. It has more than 37,000 employees, according to its website.

GCA derives the majority of its revenue from the education sector, and stands to benefit as more school districts outsource their facility management to find savings to invest in teachers and equipment. Less than 20 percent of this market is currently outsourced.

Blackstone acquired GCA in 2012 from investment firm Nautic Partners LLC and other minority shareholders for around $600 million. Since then, GCA has grown its sales force to increase its market share among public schools. (Reporting by Greg Roumeliotis in New York; Editing by Phil Berlowitz)

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