Pest Control M&A Weekly Commentary – July 16, 2018 – Outlook for the 2nd Half of 2018

In this week’s commentary, we’ll be discussing:

  • What’s in Store for the 2nd Half the of Year
  • Rentokil North America Acquires Innovative Pest Management
  • Pest Control in the Emerging Markets
  • A Little More on Knocking Doors

(Grand Kempinski Hotel, Cairo, Egypt)

So I’ve been a little slow in publishing the weekly commentary lately… it’s been very busy out there. As you’re about to see over the course of the next six months, the PCT Top 100 is about to be rearranged … again.

This week’s commentary is going to be a little short and we’ll get back to normal next week.

Although I am going to touch on my recent trip to the emerging markets of the Middle East and North Africa — namely, Egypt, Saudi Arabia and Turkey — first I want to get into my thoughts on the second half of the year… [Read more…]

Rentokil Steritech Acquires Innovative Pest Management of North Carolina

The Potomac Company is pleased to announce the acquisition of its client, Innovative Pest Management, by Rentokil Steritech.

Innovative was founded by Ronnie and Rhonda Caldwell in 1999 and has grown to be one of the largest privately held pest control businesses in the Lake Norman area, north of Charlotte, NC. [Read more…]

Rentokil Acquires Leading Vector Disease Control Company

The Potomac Company is pleased to announced the acquisition of its client, Vector Disease Control, LLC (“VDA”), North America’s largest provider of mosquito control services, by Rentokil North America. This acquisition is Rentokil’s largest US acquisition since it acquired Steritech in late 2015.

Headquartered in Little Rock, Arksansas, VDA operates from 52 offices in 32 states and the Caribbean and generates over $47 million per year in revenue. [Read more…]

Rentokil Acquires Heron Home & Outdoor

Rentokil North America has broadened its footprint in the Southeastern US through the acquisition of Heron Home & Outdoor based in Apopka, Florida.

Heron, founded in 2002, is largely a lawn care business (over 2/3 of total revenue is lawn, tree and shrub). The firm has continued to experience rapid growth (20%+ per year) since inception. In 2010, Heron generated $6,651,184 in total revenue growing to over $20 million at the time of the closing.

While you may find it a curious acquisition for Rentokil given that it’s largely a lawn care business, Rentokil didn’t have much of a footprint in Florida and if you’re going to be in the state of Florida, the conventional wisdom is that you have to do lawn as well.

The terms of the transaction were not disclosed.

 

Rentokil Acquires Allgood Pest Solutions

Rentokil Initial has acquired Allgood Services of Georgia, Inc (which trades as “Allgood Pest Solutions”), headquartered in Atlanta, Georgia, and which also operates in Tennessee.  It generated annualized revenues for the 12 months prior to acquisition of $26m (#29 in the PCT magazine list of the largest pest control companies in the USA). [Read more…]

Potomac Announces 6 Transactions: Singapore, Anticimex, Canada, and Brad Harbison of PCT Magazine and No Severed Horse Head

As we slowly begin to move into pest control M&A season, we’re pleased to announce six transactions:

Brad Harbison’s (Managing Editor, PCT Magazine) Pest Control Business was Acquired by (…wait for it…) in a Competitive, Strategic Sale Process

What pest control company ensures that the home of industry glitterati and managing editor of PCT Magazine remains pest-free? [Read more…]

Rentokil Aquires Abadi Hygiene Services of Malaysia

Rentokil Acquires AbadiRentokil Initial Pest Control Acquisitions Malaysia
Rentokil has acquired Abadi Hygiene Services. Founded 1997, Abadi is one of the largest Malaysian companies specializing in washroom hygiene, femicare, IT sanitizing, general pest control, fumigation, and termite control. [Read more…]

Rentokil North America Has Acquired the Oliver Exterminating Group

Rentokil Acquires Oliver ExterminatingOliver Exterminating Group, based in Miami, Florida, and with operations in Florida, Arizona, Puerto Rico, and the Dominican Republic, was acquired by Rentokil North America.  Oliver, with annual revenues over $30 million, was ranked number 24 in the PCT Top 100 in 2015. [Read more…]

Rentokil Acquires Remus Pest Control of Los Angeles

Rentokil has acquired substantially all of the assets of Remus Pest Control of Los Angeles. Remus Pest Control focuses on medical and healthcare facilities located in and around Los Angeles.

 

Pest Control Transaction Multiples Peak as Rentokil Initial Acquires The Steritech Group for $425 Million

Rentokil Acquires SteritechSteritech Acquired by Rentokil

As many of you have heard me say in a variety of industry speaking engagements over the last two months, valuations in the pest control market have peaked and will likely remain elevated for the next six months or so (we’ll be publishing a report on that next week and you can get it here when it comes out).

Rentokil’s acquisition of Steritech for $425 million (2.8x revenue / 28x EBITA) in cash likely represents the high water mark in terms of valuation and pricing.

John Whitley, founder of Steritech, has come full circle as he used to run Rentokil North America decades ago before founding Steritech. It’s awesome to be able to sell your business to your former employer for $425 million in cash and I salute John for building a phenomenal company — and after running it for decades — to exit at the exact right moment.

If he would have sold this business two years ago, he would have been lucky to get $250 million for it — what a huge difference two years makes. [Read more…]