10 December 2018
Paris, France ==> New York City
This week’s Commentary is going to be very short. I am back in the US and this is the busiest Q4 on record in the industry, so I don’t have much time to write. However, I received over 400 emails on my last two Commentaries with some great questions that I’ll be answering publicly next week (no, not all 400 of them).
I’m writing this on my way out of Paris, where I attended Parasitec, the Pestworld of Europe. For those of you who haven’t been, it’s similar to Pestworld except: (a) the attendees dress nicer, (b) they drink less, (c) there are no 58-year-old chemical reps making out with 30-year-old manufacturer’s reps at the Dolphin bar, and (d) the exhibition hall actually keeps normal hours. Other than that, it’s about the same.
Upon arrival I was fortunate to have dinner and drinks at one my favorite restaurants with a dear friend who runs the largest pest control company in a former Soviet state (no, not California, I said former Soviet state); we talked for hours on pest control, life under socialism, M&A rollup strategy and the breakup of the USSR. [Note to friend, as I know you’re reading this: Dinner with you was the highlight of my trip, I know I learned more from you than the other way around].
I also had coffee with a former prime minister of Italy to discuss the ECB, EU regulations, the coming debt crisis and how brain drain, myself included, has continued to contribute to the country’s 2,000 year decline.
In most ways, European pest control operators don’t have much to be excited about. The continent (save for Switzerland) is a disaster. Just like in the US, there is large population of morons voting for freebies and giveaways from the government, all of which are funded by a dwindling number of productive members of society. Many EU governments and zombie corporations are on life support, kept alive by trillions of dollars in debt purchases by the ECB. Contrary to what Bernie Sanders says, and what you read in the US press, European-style welfare states are squeezing the life out of businesses here and the population continues to get poorer and poorer. As an Italian national and the owner a few European businesses myself, I know this firsthand.
If they have one thing to be excited about it’s the EU nanny-state’s continuing crackdown on common sense. Every time you turn around, they are banning one pesticide or another. It won’t be long before they outlaw fly swatters.
This is good news for pest control companies on the continent.
By “protecting” your every day moron, the EU’s regulatory regime continues to drive up prices, erect barriers to entry, and make it more and more difficult for people to do it themselves. As each day passes, I have a harder time making the distinction between governments and organized crime.
As I drove to CDG airport, the gilets jaunes protests were in full swing. Destroying property and throwing rocks at cars if the drivers weren’t wearing the yellow vest. As I tried to get through the crowd, I helplessly watched as they destroyed the car of a North African in front of me.
In France, just like many other European states, there aren’t enough “wealthy” people to support the massive welfare states. So the average guy making 25,000 euros a year working at the grocery store pays an extremely high level of income taxes and social charges. The OECD chart below tells us all we need to know about modern France.
During the campaign last year, President Emmanuel Macron’s apartment was immediately across the street
from my apartment in Paris. He spent a lot of time in the neighborhood talking to us about how he was going to liberalize France, lower taxes and make it “open for business.” I snapped this photo of him leaving on Monday morning for his first day of work as President of the Republic. Good luck Mr. Macron, you’ll need it.
Rentokil Acquires Vermont Pest Control
Last week we announced the acquisition of our client, Vermont Pest Control, by Rentokil Steritech.
Founded in 1991 by Art and Chere Tournet, Vermont Pest Control has grown to be one of the largest pest control operations in the state of Vermont. Vermont Pest Control operates in the territory between Albany, NY and Burlington, VT and is an important strategic acquisition for Rentokil. All of Vermont Pest Control team members will be joining Rentokil, while the sellers will remain with Rentokil until throughout the integration period.
Paul Giannamore, Managing Director of Potomac, commented: “Artie and Chere were very fun to work with and I will really miss their sense of humor. I think that this acquisition is going to be home run for Rentokil and will really help them grow their service footprint in Vermont, especially with Art and Chere remaining involved. I wish them the very best.”
On working with Potomac, Art said: “Paul is an absolutely top notch guy and he knows what he is talking about. Paul will give you the time and attention that you require. Whether you are a small operation or a very large company, my sense is that he was working exclusively for us even though I knew he was flying around the world working on dozens of transactions.”
Vermont Pest Control is both Rentokil’s and Potomac’s second acquisition in Vermont in recent years, after Rentokil purchased LR Pest Elimination.
ServiceMaster Acquires Assured Environments
What has been almost a year in the making, ServiceMaster finally signed an agreement to purchase Assured Environments of New York and will announce the transaction today at its investor conference in New York.