What’s In: Selective Acquisitions. What’s Out: Sky-High Multiples

Editor’s note: PCT’s January cover story package “What’s Hot? What’s Not” is a series of articles and research findings on major pest control industry issues from a recent PCT/NPMA survey. The following Online Extra is a look at how the industry views M&A in the coming year.

For the last two decades, mergers and acquisitions in the pest management industry have been on a tear. Most PMPs (59 percent) said they expect this pace to increase over the next five years, found the 2022 PCT-NPMA industry survey.

Private equity (PE) will lead the charge. Through October 2022, at least 15 PE firms had purchased at least one pest control company in the United States; some had acquired many and one – Anticimex (owned by PE firm EQT) - had purchased hundreds of companies, said Stuart Aust, principal and founder of The Aust Group, an M&A advisory.

Nearly half (49 percent) of PMPs expected even more private equity to enter the market. In fact, several PE firms not currently in the industry had earmarked funds – one had $1.3 billion – to do so, said Aust. “It’s just a matter of time before they get in,” he said. 

Even so, PMPs were upbeat. More than half (51 percent) said buyers recognize the value of the industry’s recurring revenue model and economic resilience, which will positively impact M&A activity.

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