“We believe so much in PCO. I don’t know why you wouldn’t use them. We had our own CFO and financial team, but PCO’s consulting took us to a higher level.” —Mike Romney
Fox Pest Control
Mike Romney & Bryant White
$120 million in 2022; 1,300 associates
HomeTeam Pest Defense, a Rollins brand
Rollins and Fox: A Next-Level Deal
Rollins Inc.’s April 2023 acquisition of Logan, Utah-based Fox Pest Control isn’t notable just for its size and scope.
Valued at $350 million, it’s believed to be the fourth largest pest control deal and the largest door-to-door deal ever in pest control industry history.
The Rollins/Fox deal is notable because it’s poised to change the way door-to-door (D2D) pest control companies are viewed and valued.
Fox’s Rapid Growth
Fox co-founders, brothers-in-law Mike Romney and Bryant White, sold pest control door to door in the early 2000s for large pest control companies as summer sales representatives. Eventually Mike founded his own D2D marketing firm called Romney Service Inc., working for Orkin, and in 2012 Mike and Bryant launched Fox Pest Control.
Mike and Bryant expanded Fox rapidly with their proven D2D sales model, “do the right thing” culture, and by being students of the industry.
In 2016, Sam Hagopian, CEO of Excel Pest Services in Teaneck, N.J., introduced Mike and Bryant to Dan Gordon, managing member of PCO Bookkeepers & M&A Specialists. Sam is a long-time accounting client of PCO.
The Fox team was eager to learn how they could improve their company both financially and operationally. Dan was excited to work with an innovative, fast-growing D2D firm with strong recurring revenue and excellent route density, both of which lead to the high gross margins that PCO advocates.
At the time Fox was grossing less than $10 million in annual revenue and running the business on spreadsheets. The PCO team set up their chart of accounts, got them on QuickBooks and began doing their month-end closeouts by branch.
“We grew quickly,” Bryant says. “Dan and PCO really helped us up our financial game and mentored our team and ultimately readied Fox for a transaction.”
At the time Fox had its own accounting team but valued PCO’s deep knowledge of key performance indicators and industry benchmarks.
“If you’re running a $2 million company or a $10 million company, it’s so different from a $120 million company,” Bryant says. “PCO helped us along those different stages to grow into both our financial and operational structure.”
Along the way, the PCO team also conducted operational audits to ensure the Fox team was running a best-in-class pest control firm, helped them boost their long-term value by adding digital marketing to the mix, and played an important role in advising Fox’s CFO Brock Searle.
“It was so valuable year after year to work with PCO to tweak things and for them to mentor our financial team,” Mike says. “They made sure we did things the right way.”
The Decision to Sell
Growing the business rapidly and properly no doubt kept Fox on Rollins’ radar. So did the decades-long relationships between Fox’s owners and Rollins’ leaders — and Fox’s marketing savvy.
For the last six years the Fox team produced a culture book, inspired by online shoe retailer Zappos. The goal was to promote the company’s culture and values internally and externally through compelling stories and stunning visuals. Each year Fox sent a copy of the slick, hardbound culture book signed by Mike and Bryant to friends and executives in the industry.
In January 2021, the folks at Rollins reached out to Mike and Bryant to gauge their interest in selling. Discussions began in earnest in April 2021, and progressed from there.
“At first, we weren’t too interested in selling; however, as we discussed the strategic opportunities with Rollins we believed the relationship with them would be good for our team,” Mike says. “We also heavily considered the amount of sacrifice our families had made for years and decided it was the best time to move forward and spend more time with our families. Also, we really liked Rollins as a long-term strategic player vs. selling to a private equity firm. It made so much sense.”
Several months into the conversations, Fox brought on Dan and the PCO team as their broker. PCO had served as trusted advisers to Fox for several years, so it was a natural fit to involve them in the M&A process.
“Dan was really critical in crunching numbers and helping us get the highest valuation we could,” Bryant says. “He spoke the same language as the Rollins acquisition team and was instrumental in translating the value of door-to-door.”
Despite the buyer reaching out to the seller to initiate the deal, the PCO and Fox teams went out to the market to understand all their options.
“It was really important for us to put together an amazing board book,” Mike says. “The Fox and PCO team were awesome working together on this.”
When it came time for due diligence, Brock and Fox Chief of Staff Rory Anderson collaborated with the PCO and Rollins teams throughout the process. Despite the hundreds of hours and mountains of data required, Mike calls the selling process a pleasure.
“It goes back to relationships,” he says. “It was a natural fit thanks to the relationship we started with the Rollins team 23 years ago. We worked together for years in multiple markets to help the Rollins organization grow throughout the country and we always looked for a win-win situation. It was no different here. We’re good guys, the Rollins team are good guys, and the PCO team are good guys. It felt right from the beginning because all parties had a history of doing the right thing and putting the relationship first.”
Would the deal have happened had Mike and Bryant not sold pest control for Rollins all those years ago? Maybe.
But Mike says it’s more about having an amazing team and running a high-performing pest control company: “Rollins does business the right way. They knew we did business the right way, and we have a world-class Fox family team.”