Editor’s Note: This article was reprinted with permission from Techletter, a biweekly training letter for professional pest control technicians from Pinto & Associates.
As fall turns to winter, customers might assume that they can forget about outdoor pests until spring returns. What they don’t realize is that many tick species, and especially the blacklegged (deer) tick, can remain active all winter long.
It makes sense that ticks could be active until the first hard frost but whether they remain active throughout the winter depends on the tick species, your location and how cold the winters get. For instance, in northern California and southern Oregon, adults of the western blacklegged tick, Ixodes pacificus, were found to be most abundant during cooler seasons. This western vector of Lyme disease is most active from fall to spring with numbers peaking in mid to late winter. Western blacklegged ticks are driven primarily by higher moisture in winter, not cooler temperatures.
The eastern vector of Lyme disease, Ixodes scapularis, the blacklegged tick, is most active during warm weather months, but can remain active all winter unless the temperature approaches freezing or there is snow cover. Even these periods of inactivity are usually short-lived because the ticks will resume activity as soon as conditions warm up a bit or snow melts. For freezing temperatures to kill most ticks, there must be a sustained number of days below 10 degrees Fahrenheit.
Fall weather may mean ticks are even more active as they begin a frantic search for a host animal whose body heat and blood will allow them to survive the winter. Those that fail to find a host before cold weather are forced to spend the winter in protected places and they may not survive. Typical overwintering sites for ticks are in lawns under leaf litter, in garden debris, in thick shrubbery under bark or under snow cover.
IMPACT ON DISEASE TRANSMISSION. It’s easy to see how global warming or climate change can be a factor affecting the life cycle of ticks. Blacklegged ticks have a two-year life cycle so there are times when two or more stages overlap. October is a key month in the blacklegged tick’s life cycle. If fall weather remains warm and allows ticks to extend their host-searching, more ticks will find hosts and will survive the winter.
As winters get warmer, there are fewer extended cold spells that will kill overwintering ticks. More ticks surviving the winter means more ticks looking for hosts in the spring. That means more infected ticks to transmit Lyme disease or other diseases. The take home message is that there is really no time of the year when you can assume that ticks (and Lyme disease) are not factors. People and pets still need some level of protection, even in winter.
The authors are well-known industry consultants and co-owners of Pinto & Associates.
B’More Plays Host to PestWorld 2017
Features - PCT on the Road
NPMA reported that 3,700 pest management professionals visited a trade show that featured the products and services of more than 200 companies.
More than 3,000 industry professionals from 80-plus countries made their way to Baltimore in October for NPMA PestWorld 2017, the National Pest Management Association’s 84th annual convention and exposition.
To kick off this year’s event, NPMA played a professionally made video it created that illustrates the important role pest management professionals play in protecting health and property; the video is an updated version of its “Pride in Professionalism,” the video NPMA created 15 years ago.
NPMA CEO Dominique Stumpf then reviewed how the association and its members are working to achieve the ambitious vision statement it created last year, which is “to have every household and every business use professional pest management services.”
Kathy (Kness) Wauson is the third-generation family member running Kness Mfg., Inc.
Stumpf said, “Since then, we’ve focused on (1) our members, by giving them the tools they need to succeed; (2) establishing ourselves as an authority on public health by joining important conversations, and having a seat at the table with other industry partners like CDC and EPA; (3) continuing to make quality consumer connections with invaluable marketing support from the Professional Pest Management Alliance; (4) and proactively engaging with regulators and policymakers to protect your interests and drive change where needed.”
PestWorld featured General Session speakers Doc Hendley and Commander Kirk Lippold (see related articles). Other highlights of this year’s event included the Technicians Luncheon, sponsored by PCT; the NPMA Thought Leader Program; and educational tracks on online marketing, integrated pest management, public health, food safety and wildlife control.
Next year’s event will be held Oct. 23-26, in Orlando, Fla., at the Walt Disney World Swan and Dolphin Resort.
A photo review and related articles from the event are featured in the following pages. Visit www.pctonline.com for additional coverage.
Kirk Lippold shared seven crisis managment tips.
USS Cole Captain Encourages PMPs to Develop Critical Thinking Skills
As part of the Syngenta-sponsored General Session at NPMA PestWorld, attendees heard from Kirk Lippold, who was the Commanding Officer of the USS Cole on Oct. 12, 2000, when the ship was bombed by Al-Qaeda terrorists during a refueling stop in the Yemeni port of Aden. Lippold used his experiences on board the USS Cole that fateful day for outlining seven “human factors in crisis management.”
STAY CALM — If you as the leader of your organization do not take the time to center yourself and take that deep breath, panic and uncertainty will set in and that will spread to those looking up to you.
FOCUS — When a person who works for you comes to you with a problem, it might be just a little “wedge of concern in your world,” but it is a major concern in their world. Take the time to listen and focus on what they are saying and make the best decision possible.
Make Decisions — In a crisis it is not true that sometimes making no decision is the best decision, Lippold said. “You have to make decisions, and you have to do so based on the information you have at the time.”
ACT NOW — THINK AHEAD — “This is when you say, ‘OK, I’m dealing with this now...but what is the next thing after that, and the next thing after that?’”
PEOPLE FIRST — What does your team — and perhaps their families — need to get through the crisis. This is critical because you will be relying on them to work extended hours.
COMMUNICATE — Lippold said it is important to communicate not only with your team members, but with others in your industry. For example, when a hurricane hits, keep the lines of communication open with your industry colleagues.
RECOVER — After taking the aforementioned steps, re-evaluate where you are at and make adjustments as necessary during the recovery process.
“Doc” Hendley shared his “Wine to Water” story at PestWorld.
Bartender Turned Humanitarian Reminds Attendees of Their Everyday Impact
Sometimes the most unlikely people can have the most profound impact. Such is the case of Doc Hendley, who gave a General Session speech sponsored by Dow AgroSciences. In 2003, the part-time musician thought his calling was to pen a country song titled “Wine to Water.” That hit song never came to fruition, but it got Hendley thinking about the parable in which Jesus turned water into wine. So, he began researching water. What he discovered was that (at that time) 1.1 billion people lacked access to clean drinking water.
Moved by this and other findings, in 2004 Hendley began holding food/drink charity events to raise money for the fight against the global water crisis. After some research, Hendley settled on a North Carolina charity he was confident would get the funds to the right people. The leader of this charity saw something in Hendley beyond his ability to raise funds; he coaxed him into working for the charity.
Six months after his first charity fundraiser, in August 2004, Hendley was on the ground in the dangerous Darfur region of Sudan. After a lot of trial and error digging wells, Hendley began engaging with local rebels who were fighting the corrupt government. What he learned was that there were already existing wells installed by past international humanitarian aid workers, but they were no longer functioning. So, Hendley began researching and learning how to fix broken down wells. In the process, he learned that about 60 percent of humanitarian-dug wells in sub-Saharan Africa were not functioning (essentially, they would get dug and begin operating, but then the humanitarian efforts end there with little to no follow up). This was another “aha” moment for Hendley, who began concentrating his relief efforts less on digging new wells and more on restoring existing wells.
Hendley took this one step further, teaching locals how to use the tools and technology to fix the wells themselves, akin to the old proverb “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.” Said Hendley, “I wanted to empower the community to take care of their own problems.” Hendley continues his work to this day. According to his website, today Wine to Water has dug, repaired and sanitized drinking wells for 25,000 people in five Third World countries. — Brad Harbison
Party of Five
Features - LEADERSHIP AWARDS
Juan Angulo Jr., Stuart Aust, Wayne Golden, John Myers, and Dr. Nan-Yao Su were honored as this year’s Crown Leadership Award winners at NPMA PestWorld.
At NPMA PestWorld in October, PCT and Syngenta took time to recognize five individuals chosen as 2017 Crown Leadership Award winners, during a special reception. This year’s winners were:
Juan Angulo, Jr., Superior Angran, San Juan, Puerto Rico
Stuart Aust, Bug Doctor/Anticimex, Paramus, N.J.
Wayne Golden, Rollins, Inc., Atlanta, Ga.
John Myers, Rentokil Steritech, Wyomissing, Pa.
Dr. Nan-Yao Su, University of Florida, IFAS, Davie, Fla.
Since 1989, the Crown Leadership Awards have been presented annually to pest management professionals, university educators, industry distributors and association officials who uphold the highest standards of industry ethics, while contributing their time and talent to a broad range of professional and civic organizations.
The winners were profiled in a special edition of PCT, which was mailed with the October issue. Additionally, the winners’ profiles are online here: http://magazine.pctonline.com/issue/october-2017.
“PCT and our sponsor, Syngenta, are delighted to recognize this year’s Leadership winners, all of whom have contributed positively to the growth and development of the structural pest control industry, as well as established ties with fellow business leaders, civic groups and customers in their local communities,” said PCT Publisher Dan Moreland.
“If we know anything in the pest management industry, it’s that pests just don’t stop. Cockroaches, mosquitoes, ticks are continuously evolving and threatening the state of public health across the country. Other pests, like ants, spiders and rodents, continue to find new ways to invade structures and become a nuisance,” said Pat Willenbrock, head of marketing, Professional Pest Management, Syngenta North America. “As an industry, we’re fortunate to have so many dedicated individuals who aren’t afraid to face and overcome these challenges, and who inspire others to do the same.”
To nominate someone for the Crown Leadership Awards Class of 2018, email PCT Publisher Dan Moreland at dmoreland@gie.net or call 216/393-0266.
Always Tell The Whole Truth
Cover Story - COVER STORY
What happens when the seller tells the buyer a whopper of a lie?
Editor’s note: What follows is an excerpt from “Level the Field!” by Kemp Anderson. The book is an updated version of Pam Jordan Wolf’s classic pest management M&A book and features the tagline “Bringing direction to the acquisition process.”
Previously, Anderson was vice president of business development at Scotts Lawn Service (SLS), a division of Scotts MiracleGro. His responsibilities included leading all merger and acquisition (M&A) activity, developing new service lines, growing existing service lines, as well as expansion of the franchise operations including service offerings and growth in new geography.
Prior to joining SLS, he was director of acquisitions for Rollins Inc., parent company of Orkin, responsible for expanding the company via merger and acquisition activity throughout North America and the Caribbean.
At Middleton Lawn and Pest Control, Anderson was both director of business development and manager of legal affairs. He was responsible for growing the company organically and via acquisitions, with oversight and negotiation of all acquisitions.
At the beginning of each chapter of “Level the Field!” Anderson offers a quote or two that apply to the chapter. An example: “The difference between involvement and commitment is like ham and eggs. The chicken is involved, the pig is committed,” said Martina Navratilova, winner of 18 Grand Slam singles tennis titles.
Navratilova knows something about commitment. How committed are you to selling your business for the best possible price? How many hours are you prepared to invest to win this life-changing game or business event? To sell for the maximum amount, you and your business must be committed.
Along with a step-by-step look at the process of selling a business, Anderson includes case studies based on his decades of experience in the industry. What follows is an excerpt from “Level the Field!”
I once worked on a multi-million dollar transaction where the seller said in every meeting that his employees were drug tested. He went as far as advertising he was a “drug-free workplace.” During the initial meetings, during due diligence and even at the close, the seller claimed to be a drug-free workplace.
The buyer was a sophisticated organization that acquires businesses on a regular basis. The buyer asked several times about the employees and did human resources due diligence. The buyer was under the clear understanding that the seller:
was a drug-free workplace.
had completed criminal background checks.
had completed physicals on all employees who worked in the field or delivered services.
had completed motor vehicle/driver’s license checks (MVR) and credit checks on each employee that drove a company vehicle or did service.
Despite multiple answers by the seller that these checks were completed for all employees prior to being hired, as well as any time a customer complained or a vehicle accident occurred, that was not the case. The fact was the seller never did any of these things.
The issue came to a head at an open house (which included a nice welcome buffet!) for new employees. The buyer brought in human resources, operations and even benefits executives to tell the new transferring employees what they would gain in the sale including better benefits, better and newer vehicles and equipment, and, in most cases, better pay.
The only thing left to do was to have the employees sign new non-competes, complete new drug testing, and give approval for credit, MVR and criminal background checks.
These “on-boarding” items were thought to be a formality since the seller had claimed that all of those items already had been done. When the buyer announced that these checks were required, several crucial employees got up, walked out, and were never seen or heard from again. The employees were upset and felt misled by both the buyer and the seller.
The employees who left had a significant impact on the business. Several hundreds of thousands of acquired customer value was lost. Litigation started between the buyer and seller, and funds were frozen. Ultimately, the buyer won the litigation and the seller was found to have created a fraud during the sale.
In my opinion, everyone lost — the buyer and the seller as well as the employees and customers. This was all caused by the seller simply not disclosing his lack of employment policies. What is even more disturbing is had the seller told the truth, the buyer would have still acquired the business — so the only real result from all of this was ill will and litigation.
The author is president of Kemp Anderson Consulting. Contact him via www.kempanderson.com.
The Same, Only Different
Cover Story - COVER STORY
Rand Hollon provides insight into creating maximum value while reducing risk during acquisitions of pest control companies with revenues less than $2 million.
The purchase or sale of a pest control company can certainly cause stress to the buyer and seller prior to the closing of the deal, particularly in the areas of reducing operational and financial risk and acquiring maximum value, respectively. Most pest control company acquisitions “end with everybody living happily ever after,” said Rand Hollon, a licensed business broker for Preferred Business Brokers. But, “sometimes it isn’t that good,” continues Hollon, who spoke at PCT’s recent M&A Virtual Conference. The not-so-good acquisitions tend to involve small companies for the simple fact that there are more of them.
From both sides of the transaction, maximizing value of the acquisition while minimizing the risk associated with a new owner of the pest control company is the ultimate goal of a successful deal. Crucial to the initial steps towards acquisition is for a small business owner to take short-term and long-term steps towards making his or her business attractive to buyers. Sellers need to take a look at their large accounts, or customers representing more than 10 percent of annual revenue, to leverage for additional business growth. Seen as risky to a buyer, a big account, if lost especially after the sale, would be a large hit to revenue expectations.
Hollon says offering unconventional services, such as an annual complementary sidewalk and driveway pressure cleaning, can deplete the value of the business when such unusual services are not “generally recognized customer service package offerings” of the core pest control business. Sellers also need to be mindful of route density by choosing to service customers within a reasonable geographic area. “Windshield time is not a high-value commodity,” he explains.
Imperative to making a business attractive to buyers is for a small pest control business owner to have accurate production data. He or she must understand and be able to produce numbers to explain exactly how revenue is created and driving the business. Hollon reiterates that regardless of the size of the business, “being able to specifically communicate how your revenue is created will help prospective buyers make clear assumptions.” Accurate and timely financial information in the form of a balance sheet, P&L statements and tax returns (preferably those that are professionally prepared), is essential to the needs of a buyer planning for a successful acquisition.
The overall message for a small pest control company owner is that he or she should always “look at your business as an asset because at some point in the future, you are going to be ready to sell. And don’t you want to look your best?” asks Hollon.
THE INTANGIBLES. In analyzing small company acquisitions, Hollon evaluates what is purchased beyond tangible items such as trucks or equipment. The intangible items — goodwill, company culture and commitment culture — are often a larger part of the purchasing equation. The buyer is obtaining the customers’ goodwill to continue paying for pest control services, as well as the seller and seller’s employees to transfer that goodwill to the buyer. To have a successful integration, the buyer must learn and appreciate the newly acquired company’s culture, the very culture that created the goodwill of the customer. Otherwise, integration will be difficult, as “integration is where acquisition failure lives,” says Hollon.
“Integration is more than just transferring data,” Hollon adds. Smaller companies tend to have a “commitment culture.” Customer relationships last for years and are often generational in nature, including adult children and other relatives. Employees are also long-tenured. Employees choose to work and remain at smaller pest companies because office politics are almost non-existent when compared to larger pest businesses. As a result, employees are typically more committed to the organization. An advantage to the buyer is to recognize and appreciate this commitment culture.
“A great acquisition really brings a wonderful, transformative value to your business,” explains Hollon. Having a good level of integration competency will set a buyer on the path to a successful acquisition with long-term benefits. Acquisition success is then created with the capture and creation of value. The buyer experiences “value capture” during a company purchase that also has a successful contract structure with good valuation and financing. “Value creation” represents the ability to deliver future services successfully while developing customer goodwill, capitalizing on employee knowledge, and building future company leaders.
Value Creation + Value Capture = Acquisition Success Without great integration, value capture might not happen. Without great integration, value creation will not happen.
Successful acquirers buy frequently and constantly, regardless of the state of the market. Hollon says that in the successful acquirer’s view, “integration is where maximum acquisition value lives.” And, how a buyer creates a successful integration and value creation, he identifies in six important steps:
Learn the business by digging deep into the financials while fully understanding the operations.
Create an integration team and identify which person will be responsible for what tasks, while being mindful of the effect on the employees to ensure that everyone is committed.
Identify the integration strategy to create “a compelling vision for everybody that will be involved.”
Establish priorities. Identify and plan for the communication and handling of issues that will undoubtedly arise.
Create supporting alliances and determine who has the influence in the acquired business. Hollon explains that “influence doesn’t always follow the organizational chart.” Determine the people who the employees “informally look to for direction.”
Be gradual and deliberate while focusing on the integration.
The bottom line: Good integration management is imperative to the acquisition process and can help ensure a successful purchase for the long term. Planning for a successful integration leads to the deal’s closure.
A successful deal — for both sides of the smaller pest control company acquisition equation — relies on accurate predictions and assumptions. Every decision made during the planning phase is an attempt to forecast the future, said Hollon. Buyers must analyze and forecast how the acquired employees will fit into the organization, the length of time before an investment return is realized, or whether they’ll see a return at all.
“It’s critically important for all parties to know that at the end of the day…good decisions rely on making these right assumptions,” Hollon said. The most helpful factor in making these right assumptions is for the buyer and seller to see each other’s points of view. “Know that there’s more to a deal than getting to a closing table.”
