Proven Expertise in Brokering Pest Management Business Resulting in Maximum Value to Our Clients a Division of PCO Bookkeepers Over 175 Million Dollars in Sell Side Transactions All Negotiated at Some of The Highest Pest Control Industry Valuations in History

WILLIAM BLAIR / PCO M&A SPECIALISTS MONTHLY PEST PULSE

PCO M&A & Succession Specialists has teamed up with William Blair & Co, one of the most seasoned Equity Research houses that covers the pest control industry to create the William Blair / PCO M&A Specialists Monthly Pest Pulse index. This index is a collaboration between the fundamental research and insights from the Blair team and the hard data from PCO M&A Specialists sister firm, PCO Bookkeepers,

an outsourced CFO and accounting firm that focuses on the pest control industry with over 300 industry firms as clients that make up over $650 million in annualized revenue.

Our growth estimates are supported by real historical data and vetted by Wall Street experts. The historical data and reports we pull from our clients’ records provide strategic buyers with the components that are most important to building their models including tracking of customer retention, the all-important recurring revenue, and SG&A costs they can use to build their profitability analysis.

Check back for Monthly Index Updates

The Pest Index tracks the monthly performance of 140 different privately held pest control companies across 30 states with combined annual 2019 revenue of $320 million. The purpose of the report is to track the monthly performance of several different U.S. pest markets, including residential, commercial, and termite.

December 2020 Summary

The total U.S. pest control index increased 8.8% year-over-year in December 2020. On a sequential basis, the index decreased 3.8% from November 2020. This is slightly better than the historical trend. The index declined 5% sequentially in December 2019 and 10% sequentially in December 2018. This index includes recurring and nonrecurring revenue for residential pest, commercial pest, and termite. It does not include residential door-to-door companies. 

Our Take

The total U.S. pest index increased 9% year-over-year in December. This marks an acceleration from November (+7%) and October (+5%). The improving trend was driven by a step-up in residential pest throughout the quarter, combined with stronger commercial growth in December.

We are again surprised by another positive monthly report as trends continued to steadily improve throughout the quarter. The work-from-home environment and favorable weather have supported stronger residential volumes (and, according to several large private competitors, stronger retention rates) since June. Meanwhile, the commercial market appears to continue to recover as mandatory restrictions are lifted and businesses continue to reopen.

We now believe our estimates may be slightly conservative for the fourth quarter. The total pest index accelerated from a monthly average of 5.2% in the third quarter to a monthly average of 7.1% in the fourth quarter. Our current models assume pest control organic revenue growth in the fourth quarter is similar to what was reported in the third quarter.

PCO M&A Specialists Pest Industry Merger & Acquisition Insights

A behind the scenes look at PMP Valuations, deal structure, tax consequences of sale & the state of the market

If you are thinking about what your next steps are in terms of the future of your company and are interested in how to maximize your after – tax value upon sale, this guide is a “must read”.

PCO M&A Specialists Industry Insights

Is Rollins really selling? My take (taxes, taxes, taxes) and what it means to you

On June 4th, I was sitting at my computer doing what every deprived sports fan has been doing during the sports vacuum caused by COVID-19. I was day trading. In addition to the fast-moving stocks I watch, I always keep aneye on pest control industry players because stock price is one of the many factors we use to gauge the market and determine maximum value for our M&A clients.

In the mid-afternoon, Rollins stock popped to an all-time high and within a few minutes dropped 5 percent. Fortunes made and fortunes lost, all in a few minutes. With my curiousity piqued, I started to do a little research on what just happened, and over the news wire I found this…

Click to Continue

Breaking: ServiceMaster to sell other brands, change name to Terminix

ServiceMaster will sell its ServiceMaster Brands (SMB) business to Roark Capital and change its name to Terminix at closing. The deal is expected to close in 30 to 60 days, making Terminix a pure pest control play, as the company chases the sky-high Rollins valuation.
SMB is a franchising operation with two primary segments:
• Restore – residential & commercial restoration services following fires, hurricanes, water pipe bursts, etc.; and
• Cleaning – janitorial and residential cleaning services.

Click to Continue

How does low interest rate affect the pricing model and what happens to company values if they rise?

As noted in our valuation discussion when using a free cash model for determining the value of a firm one of the factors used in the formula is the required rate of return A.K.A. the hurdle rate.

Click to Continue

History of Mergers and Acquisitions in the Pest Control Industry

The M&A activity since Y2K is quite different in that it has been fueled by pest control companies looking to grow their core businesses, find synergies where they can reduce costs and expand their brands. With all this competition to find the best target companies those looking for quality acquisitions have driven the valuation of these quality companies up. With most of this M&A activity coming from domestic players, the entire landscape changed when London based Rentokil did its first blockbuster acquisition in the U.S. in 2006 by purchasing JC Erlich, a multi-state firm out of Pennsylvania with over $100 million in annual revenue …

Click to Continue

CLIENT SPOTLIGHTS

Gerry-Weitz
andy-julie
halt
angelo_1
Client Horizon-2-bw
Client Horizon-3-bw
ray (2)

The PCO’s Source for Exit Planning Solutions

Subscribe to our Newsletter Click Here