ABM Renews District School Deal
In order to improve the educational environment of schools, ABM Industries Incorporated (ABM) has teamed up with the Madison County School District in Madison County, Georgia, for the third time in a row via the company’s Bundled Energy Solutions (“BES”) Program.
The BES program will enable four schools of Madison County School District to save around $5.5 million in energy and operational costs and utilize the money in infrastructure improvements.
This initiative will benefit the students as well as teachers and staff to get clean air along with a number of other facilities. Endowed with a clean and healthy environment, they will be able to deliver much better, producing quality work which, in turn, will enhance the schools’ reputation and business.
The Deal
ABM Industries intends to provide energy saving solutions along with improving lighting and ventilation systems. A host of efficient technological solutions will be provided encompassing the heating, ventilation and air-conditioning (“HVAC”) system, lighting, water source heat pumps as well as the energy control system.
In addition to these, efficient heat pump loop boiler will be installed at Colbert Elementary School while Danielsville Elementary School will be provided with a six-panel solar power system.
ABM Industries has been involved with the maintenance of the schools’ HVAC system along with the lighting facility for many years. The company expects to complete renovations by August while the control systems management will be completed by October this year.
Other Projects of Bundled Energy Solutions
Recently, ABM Industries entered into a deal with the Fayette County Career & Technical Institute (“FCCTI”) in Uniontown, Pennsylvania, to provide renovation activities through BES. The project will enable FCCTI to save nearly $4.9 million through energy savings over a span of 20 years.
The project will provide major infrastructural renovation of the Institute. In addition to infrastructure development, it will increase the electrical efficiency twofold.
About Bundled Energy Solutions
In today’s world, where organizations find energy management and infrastructure improvement quite challenging, ABM Industries offers the BES. The BES are cost efficient and simply caters to building owners as well as facility managers who are interested in improving energy management.
Each client can get solutions as per his/her own requirements. Moreover, the clients can reallocate the savings from the project and pay for the improvements on the energy front.
Our View
We believe that BES will help ABM Industries to get new deals along with the renewal of the existing ones. This will also enable the company to combat with the growing threats from both local and national players, driven by low cost of entry into the facility services business.
Recently, ABM Industries has chartered the ABM Energy for implementing technologies that would benefit the customers by reducing their energy consumption as well as operating costs. The company’s capabilities have significantly improved with the acquisition of The Linc Group in 2010.
However, a significant portion of Linc’s revenues is generated by government contracts. Reduced government spending on outsourced services as well as payment delays may weigh on revenues.
Currently, we have a long-term Neutral recommendation on ABM Industries, which is in line with the short term Zacks #3 Rank (Hold).
Read the Full Research Report on ABM
More From Zacks.com
