***updated on 11/16/2015***
MEMPHIS, Tenn. – Terminix announced the acquisition of certain assets of Provo, Utah-based Alterra Pest Control. Founded in 2012 by CEO David Royce, Alterra is one of the fastest growing pest control companies in the U.S., with more than 400 full-time employees in 22 branches across 15 states. The company, which ranked 19th on this year’s PCT Top 100 list, reported 2014 revenues of $44.675 million, a 64% increase over the previous year. Royce told PCT that Alterra experienced continued growth in 2015 and it is now a $75 million company.
"By adding Alterra's customers and employees to Terminix, we build on our already strong presence in the residential pest market," said Bill Derwin, president of Terminix, a subsidiary of ServiceMaster. "This acquisition is a perfect complement to our existing business and enables us to leverage our technical expertise, marketing strength and systems to bring value to these new customers."
“It was an easy decision to sell to Terminix,” said David Royce. “We built this company with core values based on exceptional customer service, environmental responsibility and above all, a positive team mentality. We were only interested in finding a company that met these high standards and made commitments to develop our employees and meet the expectations of our customers.”
The decision to sell, Royce told PCT, was prompted by his desire to restructure the company. As part of the deal, Terminix will continue to operate Alterra under the Alterra brand; the biggest change, Royce said, is that Terminix will take over sales and marketing responsibilities. Alterra’s growth is largely attributed to door-to-door sales and Internet marketing. Terminix is a more traditional referral-based sales and marketing organization.
Royce said that selling now allows him to “take some chips off his table,” but more importantly, he says, “it was a way to invest in my people and for them to be excited about building something into the future.”
The deal marks the third time in which Royce has sold a pest control business to Terminix. In 2008, Royce, who was owner of Moxie Pest Control’s Southern California operations — which at the time was a company with more than $10 million in annual revenues, servicing more than 20,000 customers — sold that business to Terminix. A year later, Royce launched Las Vegas, Nev.-based EcoFirst Pest Control, and after building that company into a $24 million business, he sold it to Terminix in 2011.
Royce said he prefers to launch start-up pest control businesses and sell them —as opposed to building and maintaining them long-term — because of the capital it provides him. “I didn’t want to have to answer to banks or private investment firms tell me that I can’t spend money on [creative initiatives].”
Continuing with that business model, Royce said that in spring 2016 he is planning to launch another start-up, pest control business that also will be headquartered in Utah.
For Terminix, the acquisition continues its growth strategy of organic growth, new services and acquisitions. In the past 12 months Terminix has also acquired other well-known pest, termite and wildlife control companies in North America, including Ace Pest Control, Atlanta Pest Control, Bug Busters, Cabot Pest Control, Capelouto Termite and Pest Control, and Excel Pest Control.
The Potomac Company acted as exclusive financial advisor to Alterra Pest Control. — Additional reporting by Brad Harbison