(Rentokil) Shares of US extermination group Terminix soared more than 27% on Tuesday on news that Rentokil was buying it for $6.7 billion to create the world’s biggest pest control firm.
The deal values Terminix at $55 per share and carries a premium of 47%, making it the biggest acquisition by the UK group in recent years.
Rentokil is expected to pay $1.3 billion in cash to the shareholders of Terminix, with the rest being compensated in shares.
Rentokil’s CEO Andy Ransom says the company will continue looking for more buys, having brought on board at least 220 companies in about 5 years.
Ransom says the acquisition expands Rentokil’s North America presence, which controls more than a half of the global market for pest control.
The acquisition of Terminix happens at a time of boom in the $22 billion pest control industry, contributed by the rising middle classes, concerns over viruses, and climate change.
Terminix generated $2 billion in 2020 revenues, and its shareholders will own about 26% of the combined entity that is expected to serve 4.9 million global customers.
TMX: NYSE is currently up +27.01%, RTO: LON is down -8.68%
