[Mergers & Acquisitions Supplement] M&A 411

Supplement - Mergers & Acquisitions Supplement

A review of some of the players in the mergers and acquisitions marketplace.

January 29, 2013
PCT Magazine

Name of Firm: Arrow Exterminators
M&A Contact: Kevin Burns
Phone: 404/840-9100
Email: kburns@arrowexterminators.com
Website: www.arrowexterminators.com
Most notable transactions in 2011-12: Spencer Pest Control in Florida, Wilson Termite and Pest in North Carolina, Terminator Pest Control of Mississippi

Arrow Exterminators’ merger and acquisition philosophy: Arrow is super focused on finding only the highest-quality companies in the U.S. with a cultural focus of taking care of their employees and customers. The successful integration of these new employees into our company is critical to our collective long-term success.

The most important factor for Arrow Exterminators when looking to purchase a pest control business: We consider a number of critical factors when considering a merger including company culture, company reputation, employee tenure, ownership and existing management team, geographic area served, mix of business (pest control, termite, residential, commercial), recurring revenue available and overall profitability. While it is a matter in which confidentiality is a necessity, we try to learn as much as we can about the company’s employees as we are in a people business. It is also a financial transaction, so making sure that the numbers work for Arrow as well as the ownership of the merged company is important.

Arrow Exterminators says... While Arrow is a big company in our industry, it is still owned and managed by a family and operates every day as a family business. Our service centers are relatively small so our team members all know each other and treat each other like family. Come join the family.

Name of Firm: Rentokil Pest Control
M&A Contact: Alex Nigh
Phone: 678/495-3087
Email: alexander.nigh@rentokil.com
Website: www.rentokil.com
Most notable transactions in 2011-12: Western Exterminating Company, Target Specialty Products (Target is a wholesale distributor and was acquired as a division of Western), Eden Advanced Pest Technologies, Jones Consulting & Pest Services, Braemar Pest Control, BC Pest Control of Vancouver

Rentokil Pest Control’s merger and acquisition philosophy: We are quite selective about the companies we choose to partner with, seeking only those with the highest service and quality levels within the industry. We respect and value what each company has built. Each partner meaningfully contributes to helping develop the very best practices allowing us to become a better combined organization that values all its colleagues.

The most important factor for Rentokil Pest Control when looking to purchase a pest control business: Consistent with our acquisition philosophy, Rentokil is most importantly looking for companies that have the right cultural fit. A pest control business may have differing service packages or pay structures and some might emphasize residential service over commercial or vice versa. But, significantly and regardless of size — whether 10 employees or 100 — the companies we acquire must be built upon a respected and high-quality group of colleagues who share our commitment to servicing our combined customers at the highest level.

Rentokil Pest Control says... 2012 was a significant year for our acquisitions program as we have strategically increased our service footprint from coast to coast allowing us to more effectively compete for customers nationwide. We’ve grown steadily over the last seven years from revenue of less than $30 million to about $420 million through, in part, a series of well integrated and quality acquisitions.

Name of Firm: Rollins Inc.
M&A Contact: Bob Wanzer
Phone: 404/888-2818
Email: bwanzer@rollins.com
Website: www.orkin.com/globals/acquisition
Most notable transactions in 2011-12: TruTech and Waltham Services (both in 2010); Craig Thomas Pest Control; Hydrex Pest Control in Orange County, Calif.; Canadian Pest Control in Vancouver

Rollins’ merger and acquisition philosophy: Our goal is to acquire well-established, reputable and profitable pest control companies in the U.S. and Canada that put their customers first. After the acquisition is complete, it’s important for us to focus on employee retention of the acquired company, as that directly ties to customer retention.

The most important factor for Rollins when looking to purchase a pest control business: When acquiring a pest control firm, we aren’t just looking for one particular factor. An ideal candidate for Rollins provides quality service to its customer base, is involved and established in the community and has well-trained, tenured employees. The seller’s business must be healthy, profitable and have room for continued growth long after the closing. Once we sit down with the seller to evaluate whether the acquisition is a good fit with our culture and business model and then process the sale, our most important step is to ensure that the business is successfully transitioned from the seller to Rollins.

Rollins says... Rollins’ focus is to maintain long-term, profitable relationships with our employees and our customers. We have an international presence, years of experience in acquiring successful pest control firms and have developed a seller-friendly process for acquisitions. We offer tremendous growth, opportunity and options for all parties involved to ensure there’s a smooth transition.

Name of Firm: Terminix
M&A Contact: Fred Murray
Phone: 855/864-5685
Email: fmurray@terminix.com
Website: www.terminix.com
Most notable transactions in 2011-12: Terminix has had one of its most successful years on record with the purchase of Eco-First, Schendel, and master franchises in the Caribbean and Central America, including three sub-licensee companies. We also entered into a joint venture project in India, which will dramatically expand our international footprint in the years to come.

Terminix’s merger and acquisition philosophy: Acquisitions and mergers are an important means to grow revenue, employ highly skilled and competent people and possibly explore new practices. We are proud that we have acquired key personnel, including senior management, through many of our acquisitions. Our goal is to negotiate transactions that are a win-win for both sides.

The most important factor for Terminix when looking to purchase a pest control business: Terminix looks for a good cultural fit, strong management, a healthy percentage of recurring revenue and assets that are in good shape. For larger pest operations, we consider geographic penetration and the possible enhancement to one of our service lines.

Terminix says... As the world’s largest pest control provider, Terminix offers unmatched experience and expertise to business owners thinking about selling their businesses. If you’re worried about leaving your customers, don’t be. Terminix is looking for solidly run businesses to acquire and smart managers to join the team.

Editor’s note: To have your firm’s M&A information profiled in PCT, send an email about your company to jdorsch@giemedia.com.