Rentokil cemented its position in North America as it snapped up a family-owned pest control business based in Chicago with about 10,000 customers and annual revenues running into the tens of millions of dollars.
Anderson Pest Solutions, founded in 1913, is the largest family-owned pest control business in the Midwest, serving business and residential customers in Illinois, Indiana, Missouri and Wisconsin. The compaany specialises in environmentally friendly treatments.
With annual revenues last year of $21 million, the vast majority of its client base is commercial, including schools and universities, hotels, shopping centres and restaurants.
Rentokil did not disclose the purchase price for Anderson, although it is thought to have paid a small multiple of its annual earnings.
The deal marks the 18th acquisition in North America by Rentokil, regularly dubbed The Royal Ratcatcher, in the past 18 months.
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It is one of the four biggest players in the market, which is the world’s largest for pest control and is estimated to have been worth $7.5 billion last year.
It competes fiercely with Orkin, Terminix and Ecolab and between them they accounted for about 45 per cent of the total revenue for termite and residential general pest control markets in the US last year.
Andy Ransom, Rentokil’s chief executive, said that buying Anderson gave it access to potentially valuable long-term customer relationship at a business that also works in the manufacturing and property management sectors.
“With an 80 per cent commercial portfolio, areas of potential growth include introducing additional services such as Rentokil’s bird control and bioremediation expertise to Anderson’s customer base, but also the benefits that Anderson’s particular expertise in eco-effective pest control will bring to us,” Mr Ransom said.
“North America is an important growth market for the company and our pipeline of acquisitions in pest control remains strong as we expect to continue the acceleration in pest control and deliver the next phase in our plan for profitable growth,” he added.
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Rentokil has long been ambitious about expansion in the US and has completed more than 50 takeover deals there over the past ten years. Among the largest was in 2012, when it bought the Western Exterminator Company, based in California, for $92.6 million in cash.
There are almost 20,000 pest control companies in the US and the market is ripe for consolidation. According to figures from Rentokil, the average number of technicians in each company is just five and a half.
Although it is now on a firm footing, Rentokil has been through its fair share of turbulence during its history.
Among the most memorable, amid frustration at the slow pace of the company’s turnaround at the time, Sir Gerry Robinson, the former chairman of Allied Domecq, attempted to pursue a takeover bid in 2005.
Sir Gerry, who had attracted notoriety for his TV series about being an entrepreneur, I’ll Show Them Who’s Boss, eventually dropped his pursuit amid discomfort from some shareholders about his demands for a £55 million remuneration package.