About Paul Giannamore

Managing Director at The Potomac Company where I head the firm's strategy consulting and investment banking practice focused on the structural pest control and integrated facilities services industries. I write the Pest Control M&A Weekly Commentary and The Potomac Pest Control Executive, newsletters read by thousands pest control professionals in scores of countries (you can subscribe to it below). In a nutshell, I do two things: (1) advise shareholders and senior management of pest management firms on creating value in their businesses, (2) advise sellers on the sale of their businesses. Based in Geneva, Switzerland, I'm a graduate of Cornell University, and I speak Italian, Spanish, Arabic and broken French. Join me on LinkedIn

Is Rollins for Sale?

I wasn’t going to comment on the latest Rollins rumors, but given that I’ve received scores of calls from clients, institutional investors, hedge funds, industry magazines and the financial press, I guess it’s time for me to say something. 

Last week, Bloomberg published a brief article, the relevant snippet is below:

(Bloomberg) — Rollins Inc., a pest-control services provider, is exploring strategic options including a potential sale, according to people familiar with the matter. The Atlanta-based company is working with financial advisers, said the people, who asked to not be identified because the matter isn’t public. The company has not yet launched a formal auction and Rollins could opt to remain independent, they said.

A representative for Rollins didn’t immediately respond to calls seeking comment.

In my experience, Bloomberg is not typically wrong. I think that ROL likely engaged Goldman Sachs. However, we should all keep in mind that most publicly-traded businesses engage investment banks, and most investment banking engagements are not M&A related. 

Given that the Rollins family — through individual holdings and the holdings of the family trust owns more than half of the Company — the most likely reason for Rollins to engage financial advisors is for family estate planning purposes. 

Gary Rollins (CEO) is in his 70s, and Randall Rollins (Chairman) is pushing 90. Further, the family just settled the lawsuit related to the family trust last fall, where over $2 billion in Rollins equity was in question. If there were ever a time to seek outside advice and move shares around, it would be now.

Of all of the different “options” that Rollins might be thinking through right now, there is one, and only one option that would absolutely require the company to engage a financial advisor and that is a block sale. 

If, say, the family trust wanted to sell $2 billion in Rollins stock, it couldn’t just open up an Ameritrade account and sell that stock. The sale of that stock would be an off-market transaction (known as a block sale) whereby an investment bank sells a block of stock (a minority interest) in Rollins to a buyer (perhaps a large asset management firm, or a sovereign wealth fund). 

A block sale is a privately-negotiated sale of public equities, off exchange. Such sales typically have little, if any, impact on the stock price of the company in question. The Rollins family would need a financial advisor to execute this sale for them.

If there is any fire to this smoke, this is what I think is going on. 

I don’t see any industry or financial buyers attempting to acquire Rollins at what they would have to pay in order to get the deal done.

Could the Rollins family have tired of their business being a publicly-traded company and want to take it private? Sure, that’s a possibility. But the most likely explanation here, and the simplest one is the family has privately engaged financial advisors to execute on their estate planning goals.

I don’t think that there is a whole lot to follow here with regard to the story. Just like Rollins corporate headquarters, it’s pretty boring.

We briefly discuss the situation here:

Right before the story broke, Jamie Clement and I did an interview where we discuss these and other topics. You can listen to that here or download it on Apple Podcast:

Environmental Pest Control Acquires Georgian Bay Pest Control

Environmental Pest Control, leader in safe and effective pest management since 1988, acquired Georgian Bay Pest Control, located in Meaford, Ontario in early March 2020. Environmental Pest Control (EPC) and Georgian Bay Pest Control (GBPC) share the same high standards for customer service and environmentally safe pest management. This acquisition brings together a combined 60+ years of pest control experience and knowledge. 

[Read more…]

Guidance on the Essential Critical Infrastructure Workforce: Ensuring Community and National Resilience in COVID-19 Response

Download the Department of Homeland Security Guidance on Essential services here.

In the Public Works section of the memo, Homeland Security identifies “extermination” as an essential service.

We’ve heard reports on the ground that New York and Pennsylvania are both allowing pest control firms to operate as an essential service amid widespread business shutdown.

Q2 Commercial Pest Revenue Estimates Likely to be Cut by ~25% by Wall Street; ServiceMaster’s Black Wednesday – Pest Control Daily Market Update

Given the movement in the markets and the constant requests that we are receiving, Potomac will be providing a brief daily update for the time being on the pest control public and private market news.

1. Wall Street to Cut Commercial Pest Control Estimates Significantly

After speaking with several prominent wall street analysts, we expect to see some serious cuts in commercial revenue estimates for firms like Rollins and ServiceMaster. I wouldn’t be surprised if we see Q2 2020 commercial revenue estimates down by a full 25%, maybe more.

[Read more…]

Pest Control Daily Market Update 3/17/2020 – Pest Control Deals on Hold

Pest Control Daily Market Update 3/16/2020 – COVID-19

Commentary – March 13, 2020 — The PCT Top 100 Has Lost $2.5 Billion in Enterprise Value in 2020…Thus Far

Download a Reader-Friendly PDF Version Here

On September 12, 2019, I published the following in our exclusive publication for Potomac clients, Notes from the Front Line

“Last week I returned home from Stockholm after the closing of the $200 million sale of Nomor AB to ServiceMaster in what is likely the most expensive pest control deal in history. The head of M&A for ServiceMaster wrote to me: ‘Paul, you absolutely run circles around every other advisor in this industry and you should be proud of what you were able to do for your client. Over the last decade, you’ve been the architect of the highest priced deals for every acquirer out there. Which is why we hate you’ 

[Read more…]

Pest Control M&A Weekly Commentary – Jan 28, 2020 — The Beginning of the End? Pest Control Transaction Multiples Contract for the First Time in a Decade as ServiceMaster Hits the Skids

Download a Reader Friendly PDF Here

This story begins on the morning of October 22, 2019. My flight had just taken off and I nestled into my seat to try to get some work done. An email from Jamie Clement at Buckingham Research catches my eye; the subject line is: SERV: TIMBER!!!!!!!!!!! 

There is nothing in the body of the email. Damnit Jamie, what’s going on? 

Oh no… ServiceMaster pre-released, this isn’t good.

[Read more…]

Pest Control M&A Weekly Commentary – Sept 9, 2019 – ServiceMaster Enters Europe: Now the 4th Largest Pest Control Company in Europe w/ Nomor Acquisition

Left to Right: Paul Giannamore (Potomac), Tony DiLucente (CFO of ServiceMaster), and Svein Olav Stölen (CEO of Nomor).

Stockholm, Sweden
6 September 2019

Today I am writing this Commentary on the plane from Stockholm, Sweden to Geneva, Switzerland. As it was a very busy week last week, this week’s Commentary will once again be a short one… but an important one.

This afternoon we closed on the sale of our client, Nomor Holdings AB (“Nomor” or the “Company”), to ServiceMaster Global Holdings (NYSE: SERV) in what I believe is ServiceMaster’s largest and most important transaction since its IPO in June of 2014. It’s clearly the largest pest control transaction in Europe in recent history and one that will change the competitive dynamics on the continent for years to come.

[Read more…]

Pest Control M&A Weekly Commentary – Aug 26, 2019 – SvM Enters UK? Acquisition Spend Doubles in 2019, Potomac Completes 12th Transaction of the Summer

As you’ve noticed, the Weekly Commentary (my night job) has once again been forced to take a back seat to M&A (my day job). 

Over the course of the summer we’ve completed a dozen transactions and over the next few weeks we’ll be announcing approximately $300 million in global pest control transactions. We’ll start with a brief announcement today at the end of the Commentary.

Today’s Commentary will be very short and I will focus on what’s going on in the market today.

[Read more…]