The Potomac Pest Control Group announced that it has been engaged by a leading Australian pest control firm to advise its shareholders on valuation and strategic alternatives. The decision to review strategic alternatives was driven by the fact that the firm had been recently contacted by a large, US-based pest control firm that is interested in acquiring pest control resources and capabilities in Australia.
Although the process at this point is highly confidential, the firm’s president commented, “We don’t know whether or not this is the right time to sell the business. Since we’ve been contacted by an acquirer, we thought we’d see where the market is and whether or not it’s the right time to pull the trigger. Even if we decide to continue on as owners of the business, it’s perfect timing for us to begin planning for our exit, which is why we called you [Potomac]. Potomac’s expertise in the pest control industry and global reach have come highly recommended to us… even when we asked the acquirer who they would hire, they said that Paul Giannamore at Potomac would be the first call they’d make.”
This engagement includes:
- Providing the shareholders with a preliminary valuation, including a fair market value as well as a spectrum of investment values – or a range of purchase prices the pest control company would likely sell for in the current market.
- Based upon the preliminary analysis, the shareholders might decide to take the business to market immediately or hold off on a third party sale depending upon whether or not the value of their company in the current market supports their shareholder goals and objectives.
- If the owners decide to move forward with a sale immediately, Potomac would not only negotiate with the US-based firm that made an unsolicited offer, but also begin a competitive sale process soliciting bids from other acquirers. Sarah Sullivan, head of Corporate Development at Potomac said, “In less than 50% of cases, the company that makes the unsolicited offer, or first approach, wins the final bid when the process is orchestrated correctly. Taking the first offer without increasing leverage through the competitive process is a great way to leave a lot of money on the table, and our clients understand that.” You can read a recent case study on responding to an unsolicited pest control offer here.
Paul Giannamore, known in the industry as the ‘architect of value’ said, “It’s important for pest control business owners to understand how their business creates value and what it’s worth in the current market. The sale decision, however, should largely be driven by shareholder goals and objectives and these decisions are impossible to make without the right data. Our strategic alternatives review and preliminary valuation is the cornerstone of a solid exit plan.”
For an overview of what’s going on in the Australian pest control M&A market, read: Australia: The New Frontier in Pest Control Acquisitions
Potomac entered Australia, New Zealand and Southeast Asia in 2008 and continues to be the number one global M&A, valuation and strategy consulting firm to the industry. For pest control operators in these markets, never underestimate the fact that a 10 minute phone call to Potomac can mean millions of dollars in increased purchase price. Call us today on +1-215-525-0689.
