UK business services company Rentokil Initial Plc (LON:RTO) said today it is purchasing US pest control firm Western Exterminator Company for an initial sum of USD99.6m (EUR77.2m) in cash.
In addition to the initial amount, Rentokil will also provide a deferred consideration of up to USD15m within 18 months, using its existing financial facilities. The transaction, which will be EPS enhancing in year one, is seen to be concluded later in 2012, after receiving the needed regulatory approvals. It is in line with Rentokil’s strategy of carrying out acquisitions of pest control businesses in North and Latin America as well as in the Middle East.
Following the takeover, Rentokil will establish itself as the third biggest pest control company in North America and will have pro-forma annual revenues of USD330m and USD90m in pest control services and speciality chemical products distribution, respectively.
Western Exterminator operates via two divisions. The first one is the pest control segment which has 36 offices mainly in California and the adjacent states of Arizona and Nevada. The other is the products division which is engaged in the wholesale distribution of speciality chemicals to the West Coast and central US regions.
Last year, the target business recorded an EBITA of USD4.1m on revenues of some USD149m. The gross assets being acquired have a total book value of USD36.7m.