Catching up with Certus

Features - M&A Update

The new company makes a Florida acquisition, as well as a variety of other moves to increase its brand awareness.

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February 3, 2020

Certus entered the pest control industry with a bang last spring, acquiring two Seattle-area companies with capital from its backer Imperial Capital Group. It was a whirlwind start.

“We’ve been busy,” Certus CEO and co-founder Mike Givlin said. “We closed Mathis Exterminating on April 30 (2019) and incorporated Certus the same day. We had to take a step back to make sure all the pieces were in place to facilitate our growth moving forward.” One day later, on May 1, Certus announced the acquisition of Eco Elite Pest Control, which was founded in 2008 by current owner, Brandon Bradshaw.

GETTING STARTED. Closing acquisitions and incorporating so closely together meant that Certus had to quickly establish all the basics of business operations such as bank accounts, IT infrastructure, credit and fleet management. It also made its first external appointment to its board of directors (Rich Ennis, former Steritech CEO) and hired a vice president of corporate development. “We needed to get all those things in place and structure in a way to be ready for the $150 million to $200 million company we’re going to be in the next few years,” Givlin said.

To promote brand awareness and contribute to the broader pest management industry, Certus also sponsored industry events including a golf outing at a Washington State Pest Management Association (WSPMA) meeting in August, and lunch at the National Pest Management Association’s PestWorld in October. Certus participated in WSPMA’s winter business meeting and the Idaho Pest Management Association’s expo (both in December) as well as the Oregon Pest Control Association’s winter seminar last month.

“Sponsoring and volunteering at industry events helps Certus create brand awareness of who we are and what we’re here to do,” Givlin said. “We also want to make sure we’re contributing to local pest control communities in a positive way, creating a net benefit to the markets we are in.”

EXPANDING. Givlin said Certus’ No. 1 focus for 2020 is expanding its national footprint. While the company had a successful beginning in the Pacific Northwest market, its team is actively looking to enter other parts of the United States. (See more about the company’s Florida acquisition below.)

Certus said it seeks to partner with leading regional pest control owner/operators to provide them with the capital and expertise needed to accelerate their growth while maintaining their brand.

Givlin

“We’re looking for strong performers in the local pest control markets,” Givlin said. “You’ll never see Certus as a consumer-facing brand. At the end of the day, pest control is very much a local business. We’re not going to add any value by changing XYZ Pest Control to Certus.”

Givlin also said that Certus is hyper focused on providing further opportunities for people. He sees the company’s attention to giving employees within the businesses it acquires opportunities to advance in their careers and in the industry as a differentiator.

“We are new to the market and so have a lot of flexibility and upward mobility for folks inside our business versus the larger industry players with preexisting infrastructure,” he said. “The most exciting and fulfilling part for me is watching people develop and grow in their roles. Being able to witness people do things they didn’t think they were capable of and doing what we can to help along the way is fantastic.”

SEEING OPPORTUNITY. Givlin said that Certus provides value to companies looking to accelerate their growth while allowing owners to take some chips off the table, all in a market in which valuations are at an all-time high.

In the case of a recession leading to higher interest rates, Givlin thinks it’s unlikely that valuations will increase. He said it’s a good time to sell.

“Pest control is a really frothy market,” he said. “It’s a great industry from a fundamental standpoint; it’s very ‘sticky’ with a high level of recurring service. If you’re thinking about getting out, right now is probably one of the better times in the history of our industry to look into selling your company.”

Givlin also said the pest control industry is highly fragmented and thinks some consolidation could make it stronger. He sees larger, stronger players driving the industry forward and smaller, more fragmented operators providing innovation to create a healthy balance.

“You look at the PCT Top 100 list and see the total number of companies in the industry relative to revenue,” he said. “The U.S. pest control industry fluctuates between 18,000 and 20,000 companies. There are a ton of players and people continue to start companies every day, creating a lot of opportunity for entrepreneurs wanting to grow and for companies like mine looking to capture that value when that initial owner is ready to move on to something new.”

LOOKING FORWARD. In addition to expanding into new territories and adding to his team, Givlin is driven to make Certus a Top 10 company on PCT’s Top 100 list. He said getting there will require a combination of aggressive M&A marketing and organic growth.

“Making the Top 100 list is important to me because it’s an industry benchmark,” Givlin said. “If you’re just buying your growth, you’re building a house of cards and your underlying business isn’t healthy. Combining organic growth with M&A will give us a strong and sustainable business.”

The author is an Ohio-based freelance writer.