BY Richard Summerfield
Rentokil Initial has agreed to acquire extermination group Terminix Global Holdings in a cash and shares deal worth $6.7bn.
The deal, which will significantly improve Rentokil’s presence in the US, will see Terminix shareholders issued 643.3 million new shares, worth about £3.86bn. Rentokil will pay around $1.3bn in cash. The deal implies a value of $55 per Terminix share - a 47 percent premium to its share price on Monday.
The companies expect the transaction to close in the second half of 2022, subject to regulatory and shareholder approval. Cost synergies of at least $150m by the third full year following the deal’s completion are expected.
“This is an exciting and transformational combination that will create the global leader in commercial, residential and termite pest control, and a leader in North America, the world’s largest pest control market,” said Andy Ransom, chief executive of Rentokil Initial. “It brings together c.56,000 colleagues, protecting people, enhancing lives in over 87 countries, and serving c.4.9m customers. These are two highly complementary businesses with a similar operational playbook focused on supporting great people to provide outstanding customer service across Pest Control and Hygiene & Wellbeing.
“The combination will deliver further investment and the sharing of best practices to enable our talented teams to better serve customers, protecting them from the growing threat of pests and meeting their future needs,” he continued. “We will open our first innovation centre in the US and provide our industry-leading innovations and digital technologies to a far larger customer base. This is a win-win-win for colleagues, customers and shareholders.”
“This is an exciting next step that significantly advances Terminix’s journey toward becoming a global leader in pest management,” said Brett Ponton, chief executive of Terminix. “As part of a larger and stronger organisation, we will offer superior service and an even more comprehensive range of solutions for our customers, while accelerating our investments in growth and technology. I look forward to the opportunity this combination provides for our colleagues and customers.
“The shared cultural focus on providing our people with the training, tools, and technology necessary to provide world-class customer service will provide new opportunities for our teammates to develop as part of the worldwide leader in pest control. Leveraging our strong combined residential and commercial capabilities and enhanced customer density will bring us closer to our customers and improve the quality of service we provide to our customers,” he added.
News: UK's Rentokil to buy U.S. rival Terminix in $6.7 bln pest control deal