Rentokil Initial Announces Further Acquisitions
Rentokil Initial plc (FTSE: RTO, "the Company") announces today a series of acquisitions made in the fourth quarter of 2015 and first week of 2016 in its Growth and Emerging quadrants designed to build city density and drive margin expansion.
· In North America the acquisition of Oliver Exterminating complements the Company's existing pest control activities in Arizona and Florida and also provides market entry into Puerto Rico and the Dominican Republic. The Company has also acquired Remus Pest Control in Los Angeles to build density into its local pest control operations. Combined annualised revenues for these companies were approximately £21m in the year prior to acquisition.
· In Australia the Company has acquired Knockout Pest Control, a leading independent commercial and pest control business in Sydney, operating across the metro area and further south into Wollongong. The business generated annualised revenue of £1m in the year prior to acquisition.
· In New Zealand the acquisition of Fumacare Hygiene Services complements the Company's existing operations, achieving density and back office synergies. The business offers a comprehensive range of hygiene services and generated annualised revenue of £5m in the year prior to acquisition. The Company's Pacific hygiene businesses have moved from the Protect & Enhance quadrant into the Growth quadrant from 1 January 2016.
· In Malaysia the Company has acquired Abadi Hygiene Services which delivers high quality pest control and hygiene services, primarily in the cities of Kuala Lumpur, Johor and Penang. The business generated annualised revenue of £3m in the year prior to acquisition.
Today's announcement brings the total number of acquisitions completed by the Company in 2015 to 23 (21 in pest control) with combined annualised revenues in the 12 months prior to acquisition of £158m, with Steritech accounting for £97m. A strong pipeline remains in place for 2016 and thereafter.
As previously announced, the Company's acquisition of The Steritech Group Inc. in North America was completed in early October. Integration is on track and we are pleased with its trading performance to date.
Rentokil Initial plc will announce its 2015 Preliminary results on Thursday 25 February 2016. The Company's expectations for the full year ended 31 December 2015 remain unchanged.
Andy Ransom, Chief Executive of Rentokil Initial plc, said:
"2015 was a step change year for delivering on our strategy of expanding into higher growth markets through the acquisition of Steritech and other high-quality, sizeable US pest control businesses including Anderson Pest Solutions and Oliver Exterminating. Through these, and our bolt-on acquisition programme, we've created North America's third largest pest business offering truly national coverage in the world's biggest pest control market. We will continue to look for high quality pest businesses to build density, grow market share and enhance margins.
"Our Emerging markets presence continues to expand and is well set to benefit from structural changes such as rapidly growing middle classes and increasing food hygiene regulation. We will continue to focus on expanding our Growth and Emerging market presence in 2016 in line with our strategy for profitable growth."