Parking services provider Standard Parking Corp. (SP+) announced that it plans to reduce its interests in parking operations in 29 cities across the United States. The strategic move is intended to streamline the company’s portfolio and focus on higher-margin operations. Here’s an overview of the announcement and what it could mean for SP+ and the parking industry.
SP+ provides parking management services for various properties, including airports, hospitals, office and residential buildings, and educational institutions, among others. The company operates in more than 3,500 locations across North America. In recent years, SP+ has expanded its footprint through strategic acquisitions.
SP+ announced that it plans to reduce its interests in parking operations in 29 cities across the United States, including some markets where the company has a significant presence. The move is intended to focus on higher-margin operations and to streamline its portfolio. SP+ plans to exit operations in certain markets entirely and to sell its stake in joint ventures, while retaining existing contracts in some markets.
Impact on the Company
SP+’s decision to reduce its interests in parking operations could have both positive and negative impacts on the company. On the one hand, by focusing on higher-margin operations, the company may be able to increase profitability and efficiency. By exiting operations in certain markets, the company may also be able to reduce costs. On the other hand, the move could result in fewer revenue streams and could potentially limit growth opportunities in certain regions.
Impact on the Industry
The parking industry has been impacted by the COVID-19 pandemic, with reduced demand for parking due to remote work and decreased travel. SP+’s decision to reduce its interests in parking operations may reflect broader trends in the industry, as companies look to focus on higher-margin operations and adjust their portfolios to changing market conditions.
SP+’s decision to reduce its interests in parking operations in 29 cities across the United States is a strategic move intended to streamline the company’s portfolio and focus on higher-margin operations. The decision could have both positive and negative impacts on the company, as well as reflect broader trends in the parking industry. It remains to be seen how this development will ultimately impact the industry and other players within it.
Following Standard Parking Corporation’s proposed acquisition of Central Parking Corporation, the Department of Justice is requiring the company to divest its interests within 29 cities and 21 states. On September 26, 2012, the Department announced that without the requirement for divestitures, the merger would have created a dominant presence in 29 different cities and hiked parking prices.
The Antitrust Division under the Department of Justice has also filed a lawsuit with the U.S. District Court in the District of Columbia to stop the acquisition.
The Department notes that Standard and Central are biggest parking management companies in the country. Because these companies fiercely compete by offering special incentives and better hours of operation in parking garages and lots, consumers have received lower parking prices and better services.
If the acquisition is approved, the Department is requiring Standard and Central to divest a percentage of their presence I the following central business districts: Atlanta, Baltimore, Bellevue, Boston, Charlotte, Chicago, Cleveland, Columbus, Dallas, Denver, Fort Myers, Fort Worth, Hoboken, Houston, Kansas city, Los Angeles, Miami, Milwaukee, Minneapolis, Nashville, New Orleans, New York City, Newark, Philadelphia, Richmond, Sacramento, and Tampa.
If the acquisition is approved, Standard and Central will have to divest at least 107 parking facilities in the central business districts listed above.
Standard is based out of Chicago and operates in 41 states. They own roughly 2,200 parking facilities and about 1.2 million parking spaces. Their total revenue was estimated at $729 million in 2011. Central is based out of Nashville and operates in 38 states. They own about 1 million parking spaces, and their total revenue was estimated at $800 million in 2011.
The acquisition is valued at $345 million, and the requirements for divestitures will save consumers about $85 million. Acting Assistant Attorney General Joseph Wayland commented, “These divestitures will ensure that consumers in the affected cities and states will receive better services.”
Source: Department of Justice