The big just got bigger – Rentokil buys Cannon

Rumours circulating on Wednesday (18 January) that Rentokil Initial had purchased Cannon Pest Control have been confirmed by Rentokil’s corporate head office, although no official press release has yet been forthcoming.

The word on the street is that the Cannon Pest Control business, part of the huge independently owned facilities management company (OCS Group), has been struggling for some time.

The latest OCS Group UK accounts for year ended 31 March 2016 showed that the UK OCS company made a loss of over £23m with some £13m of that being one-off restructuring costs. In the previous year losses amounted to just over £10m. Net current assets were reported as around £6m and the parent company, OCS Group, had declared it would support the UK business for the next 12 months, ending 31 March 2017.

    

Rentokil Cannon

From the accounts it is difficult to say what proportion of the losses were down to the pest control part of the business but, clearly, Rentokil sees an opportunity to turn a profit or it would not have made the purchase.

Growth by acquisition
Whilst there is no official comment from either side, the move is clearly very much in line with Rentokil’s strategy of growth by acquisition. This big UK purchase follows a number of other major acquisitions in the USA – the biggest being Steritech in September 2015, followed by the US distributor or pest control and turf products, Residex, in July 2016. In 2015 there were also purchases in Australia (Knockout Pest Control), New Zealand (Fumacare Hygiene Services), Malaysia (Abadi Hygiene Services) and the UK (Prokill).

Whether this latest move is good news for the UK pest management sector remains to be seen.

The British Pest Control Association has congratulated Rentokil on its purchase, but there’s a sting in the tail for the Association – the merging of a large servicing company member and the associated membership fee will undoubtedly have an impact.

Rentokil has always been a dominant force in the UK pest management sector. This acquisition will make it even more powerful. Whether that’s good or bad for our industry only time will tell.

Rentokil



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