OGDEN, Utah — Hawx Services, Ogden, Utah, completed in March a transaction with private equity firm PCM Growth. PCM Growth was founded and is led by Mike Paulus, a financial investor whose startup successes include Assurance IQ, a Seattle-based tech company he founded in 2016 and sold to Prudential Financial for $3.5 billion in 2019.
Founded in 2013 by President Matt Mehr and CEO Scott Wilson, Hawx began with one branch in Utah and has since expanded to 16 branches throughout the U.S. The company is almost exclusively residential (95%), providing general pest, mosquito and termite services. Hawx is a tech-savvy company whose growth has been accelerated by door-to-door sales.
“Hawx has grown rapidly by focusing on providing opportunities for our employees to grow, to nurture our customer base and focus in on that customer experience from sales all the way down through their entire service plan with us,” Mehr said.
Mehr said Hawx will expand into new geographies in the coming year, capture additional market space and “grow over the next 3-4 years to become one of the big players in this space.” Mehr and Wilson, as well as Hawx Chief Revenue Officer Jonathan Gleave, reached out to Lance Tullius, president of LR Tullius, a financial and mergers & acquisition advisory firm, to explore options for reaching this next level and beyond. Tullius had been in contact with Paulus, who was interested in making an entry into the pest control market.
Tullius, who receives numerous inquiries from private equity firms, said Paulus had done extensive research on the pest control industry and “was very efficient and laser-focused, had no capacity issues in terms of funding, and was absolutely all in.”
After selling Assurance IQ, Paulus was seeking his next venture. “I realized I love being around high-growth companies,” he said. “I love helping to disrupt and improve industries that maybe technology hasn't had a major impact on yet.”
Hawx’s Gleave said pest control is a platform that makes sense for Paulus and PCM Growth because of past successes in the insurance industry. “I think there's a lot of correlation between the two spaces and having had success in what they were able to do in the insurance space, they believe they can do in a similar fashion here in pest control.”
Like insurance, pest control is an industry where “if you do right by your customers and have a high level of service, then you have these really long relationships,” Paulus said. “And we saw at Assurance the way that you can use technology and superior service standards to increase the duration the customers stay with you, and it really impacts the bottom line.”
Paulus was impressed that Hawx is a company whose culture is both service-oriented and entrepreneurial. “It is a company that has been around long enough to have really learned the model and executed it across a number of locations, but it also has a very entrepreneurial management team that's incredibly ambitious.”
The Hawx team is excited about how the new partnership will help the company evolve from a technology standpoint. Said Mehr, “[PCM] brings a lot of strength to the team with digital marketing and really growing that platform.” Paulus too thinks PCM’s digital expertise can help Hawx grow organically. “What I think really got us excited is the way they’ve executed the high velocity door-to-door sales component. When you combine that with digital acquisition [channels], that really rounds out the portfolio of customer acquisition assets.”
While Paulus said organic is his “first, second and third” growth strategy, he likes that Hawx and PCM are both entrepreneurial and able to move quickly, and PCM will consider acquiring other companies if the fit is right. “I like being part of a rocket ship,” he said. “There's a lot of great companies out there that are looking to grow five or 10 percent a year. There’s nothing wrong with that, but I want folks that have a foundation, have a vision and are ready to really challenge themselves for hyper growth.”
With the financial backing from PCM Growth, as well as the addition of Paulus’ business acumen and experience, Hawx believes it is ready to take the next step of becoming a major player in the pest control industry. “We want to be the biggest and the best pest control company we can be, and to do that you have to have a great following of customers, and you have to be able to prove that what you do works,” said CEO Wilson. “Our goals are quite lofty. We want to continue to grow our current footprint – our four major territories – and then continue to open up new branches.”