Rentokil acquires US distributor in $30 million deal

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It was announced on 7 July 2016 that Rentokil Initial had continued its expansion in North America with the acquisition of pest control and turf products distribution business Residex LLC for US$30m.
This is yet another example of Rentokil Initial’s ambitions for their North American business as well as illustrating the depth of their pockets!

For non-USA readers, Residex is the largest independent products distribution company in the US, with annualised revenues for the 12 months prior to the acquisition of $113m.

This acquisition, added to the existing Rentokil-owned Target Specialty Products, will boost the company to virtual pole position in the US pest and turf control products distribution business, rivalling that of Univar.

This business model of both distributor and servicing company is somewhat unique to North America and is not one particularly popular to several pest control companies who, in effect, are buying their product inputs from their main competitor.

Rentokil Residex Merger For News Page

Unfortunately this news was released after the posting of the story regarding the Rollins acquisition of Safeguard in the UK. In it the relative size of Rentokil USA was shown.

The press release issued by Rentokil Initial stated:
“The acquisition increases the scale of the company’s existing pest and turf products business, which more than doubles in size. It creates the second largest business of this type in the US market, delivering national coverage and a greater density footprint.

Andy Ransom, chief executive of Rentokil Initial said: “I’m delighted to welcome the Residex team to Rentokil Initial. North America is a strategic growth market for Rentokil with great potential for continued profitable growth and our acquisition pipeline remains strong. The addition of Residex means that our business in North America is set to deliver annualised revenues of around $1 billion by the end of the year – some two years ahead of our expectations.”

Implications for US market
For a more detailed commentary on the background and affects of this acquisition in the USA, read the report posted by Brad Harbison of Pest Control Technology.

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