READING Pa., and APOPKA, Fla. — Rentokil Steritech has acquired Apopka, Fla.-based Heron Home & Outdoor, a $20 million business that ranked #42 on the 2016 PCT Top 100 list. The acquisition strengthens Rentokil Steritech’s presence in Florida and provides the company with expansion opportunities in the country’s largest pest control market.
Heron was founded in 2002 by Joe Patti, Rodney Lackey and Steve Okros, pest control industry veterans who had previously worked for Middleton Lawn & Pest Control. From a small, start-up venture, Heron has grown steadily throughout the years, now employing more than 200 with nine offices throughout Florida. All existing employees will stay on and the current leadership will remain intact to run the operations moving forward to guarantee a seamless transition for all Heron customers, Rentokil Steritech said in a press release.
“This new partnership is very exciting, as we expand our reach and services in the central Florida market to best serve our residential customers,” John Myers, president and CEO, Rentokil Steritech, said in a press release. “The company values of Heron and Rentokil Steritech are aligned, as both teams are deeply committed to delivering exceptional customer service. We are thrilled to have acquired such a strong management team and are excited to also expand commercial pest services to Heron in this market.”
In 2014, Heron added Greg Clendenin, a 38-year industry veteran, whose background includes leadership positions at Sears Authorized Termite and Pest Control and Middleton Lawn & Pest Control, where he managed Patti, Lackey and Okros. As part of the deal, Clendenin will stay on with Rentokil Steritech, overseeing the Heron operation (Patti, Lackey and Okros will be leaving the business). “We have a lot of respect for Greg and him staying on was a really important component [of the deal],” Myers told PCT.
Clendenin, in the Rentokil Steritech press release, commented.“We admire the growth-oriented nature of Rentokil Steritech and we couldn’t be more enthusiastic to embark on this partnership together.”
The Heron acquisition is significant for Rentokil Steritech as it marks the company’s second major purchase in Florida with significant M&A opportunities. Rentokil Steritech’s other major purchase in the Sunshine state was the 2015 acquisition of Oliver Exterminating Corp., which includes entities Arizona Exterminating, Guarantee Floridian Pest Control and Oliver Exterminating of Puerto Rico and the Dominican Republic. Oliver has 16 offices — including four in Florida.
“We felt it was important to improve our position in Florida because of the great opportunities we see today and we see going into the future,” Myers said.
PCT reached out to Florida-based industry consultant and M&A specialist Kemp Anderson for his assessment of this deal. “If you look at the Rentokil model and footprint, clearly they are addressing a gap in the U.S. footprint by acquiring Heron. When Rentokil acquired Oliver, the bulk of that business is actually in Arizona and the Caribbean with a small amount primarily in southeast Florida and Miami. So the Oliver acquisition, while very meaningful did not really address Florida for Rentokil. Heron addresses Florida in several ways.”
One of the critical ways is the addition of Heron’s lawn care expertise. In Heron, Rentokil Steritech is acquiring a company in which 65% of its revenues are from lawn care. “[Rentokil Steritech] has some businesses with lawn care as a component, but it's certainly not a large part of our portfolio,” Myers said. “We clearly recognize that in Florida customers like a combined offering — if you are going to operate in Florida you have to have it. Heron has done a really good job in that space. We feel like we are going to be in a really good market with a really good company.”
It will be interesting to see how Rentokil Steritech’s acquisition will reshape Florida’s pest control industry in years to come. Anderson said it could signal the beginning of big changes for the Sunshine state. “It seems fairly straight forward that this is the beginning of what will probably be several years of active mergers and acquisitions in Florida for Rentokil, and the other larger pest control companies. Time will tell what it does to valuations; however, it is hard to imagine valuations declining in Florida in the coming years.”