Acquisition of Atlanta-based Allgood Pest Solutions
Rentokil Initial plc (FTSE: RTO, "the Company") announces the acquisition of Allgood Services of Georgia, Inc (which trades as "Allgood Pest Solutions"), a high quality pest control company headquartered in Atlanta, Georgia, and which also operates in Tennessee. It generated annualised 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)*.
Last year, Rentokil Initial acquired 17 businesses in North America, in line with the Company's strategy to accelerate growth in its pest control business and to pursue acquisitions in higher growth markets. In particular, during the fourth quarter, the Company acquired Isotech Pest Management, a commercial pest control company with annualised revenues for the 12 months prior to acquisition of $13 million. Isotech (58th in the PCT Top 100 list) is a long-established pest control provider in Los Angeles and Orange Country, and is therefore an excellent density fit with the Company's existing Western Exterminator business.
The pest control market in North America is estimated at just over $8 billion annually, and accounts for some 50 per cent of the global market, making it strategically significant for the Company.
Value-creating M&A in 2016
During 2016, the Company acquired a total of 41 businesses for £107 million (35 of which engage in pest control and have combined annul revenues of £124 million). In addition to the 17 companies acquired in North America, the Company acquired businesses in Australia, Austria, Brazil, Canada, Chile, China, Denmark, French Guiana, Germany, Guatemala, Honduras, Hong Kong, Malaysia, New Zealand, Republic of Ireland, Spain, Switzerland and the UK.
In the 2017 fiscal year to date, the Company has acquired 5 businesses in the UK and Ireland, Australia and Singapore (four of which are involved in pest control, and one of which is in property care) - with combined annual revenues of approximately £15 million.
Andy Ransom, Chief Executive of Rentokil Initial, commented:
"Allgood is an outstanding business with an excellent reputation for customer service and high levels of customer retention. The acquisition is designed to build scale and customer density in the states of Georgia and Tennessee where the warmer climate means a higher pest intensity.
"In 2016 we acquired 41 businesses, primarily in our Growth and Emerging markets, and our pipeline of acquisitions remains particularly strong."
Rentokil Initial will announce its Preliminary Results for 2016 on 23 February 2017.
* This acquisition does not include the purchase of Allgood Services, Inc. which is based in Dublin, Georgia, and also operates under the Allgood Pest Solutions brand, outside of the Atlanta market.
About Allgood:
Allgood operates primarily in the Atlanta metro area, but also includes the northern 2/3rds of the state of Georgia and the eastern 1/3rd of the state of Tennessee. All the areas that Allgood operates in have strong pest pressures; termite services in particular.
The state of Georgia has 10.2m people and is the 8th most populated state in the USA. The Atlanta metro area is the 9th largest metro area in the USA and has a population of 6.1 million, the 17th largest city economy in the world (and 8th largest in the USA), and is home to the third-largest concentration of Fortune 500 companies in the USA including the world headquarters of Coca Cola, ATT Mobile, Home Depot, Delta Airlines and UPS.
About Isotech:
Isotech is one of the largest independent pest control companies in California and a Los Angeles metro population estimated at 13 million people. Isotech have featured on US television for several years as 'The Verminators'.
Visit www.rentokil-initial.com for more information.
