8 January 2015
Rentokil Initial acquisitions
Rentokil Initial plc (FTSE: RTO, "the Company") announces the acquisition of Peter Cox Property Care, a leader in the provision of remedial property care services (wood-boring insects and damp proofing) to the domestic and commercial sectors. It joins the Company's existing Rentokil Property Care business in the UK securing nationwide coverage and adding regional density in this growth market.
The Company has also acquired two pest control businesses: EcoTime Pest Control in Italy and Tropical Pest Control in the Bahamas. EcoTime, based in Milan, represents an important density building opportunity in Northern Italy, whilst the acquisition of Tropical, a leading player in the Bahamas, sees the Company enter the Bahamian pest control market and will complement the Company's existing hygiene operations in the country.
Combined annualised revenues for the last audited period of Peter Cox, EcoTime and Tropical were approximately £24m. The deals are in line with Rentokil Initial's strategy of accelerating its M&A programme to pursue targets in higher growth markets and in areas which add local density to existing operations.
Today's announcement brings the total number of acquisitions made during 2014 to 30 (23 in pest control) with combined annualised revenues in the 12 months prior to acquisition of £66m and a total combined consideration, including deferred consideration in line with normal contractual protections and the achievement of certain operational targets, of £76m.
The Company also announces the disposal in December of its Austrian hygiene products business to Hagleitner Technics GmbH. The business was in the Company's Manage for Value quadrant and its disposal continues our strategy of divesting non-core, lower margin businesses and follows the disposal of the Spanish Medical and Initial Facilities businesses earlier in 2014. The business generated sales of £8m in the last financial year.
Rentokil Initial plc will announce its 2014 Preliminary results on Friday 27 February 2015. Our expectations for the full year ended 31 December 2014 remain unchanged.
Andy Ransom, Chief Executive of Rentokil Initial plc, said:
"2014 was a busy year on the M&A front for Rentokil Initial. I am delighted with the businesses we have acquired and pleased that the integrations are progressing well. It is particularly pleasing to secure the Peter Cox acquisition which is an excellent business in a growing market sector.
"In 2015 we will continue to pursue our differentiated strategy to deliver profitable growth, organically and through targeted acquisitions that meet our returns criteria and which build our core businesses in Growth and Emerging markets."
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Notes to Editors
About Rentokil Initial plc
Rentokil Initial is one of the largest business services companies in the world, operating in over 60 countries. The Company offers route-based services including Pest Control, Hygiene and Workwear through teams of local experts.
Rentokil Initial's differentiated strategy
On 28 February 2014, the Company announced its plan to deliver sustainable revenue and profitable growth. The plan is based upon a new, more focused model for the Company which included the introduction of five geographic regions, a focus on three core categories of pest control, hygiene and workwear, the sharing of best practice within a lean operating model and delivering the highest standards of customer service through colleagues who are technical experts.
As part of this new model, the Company has also begun to manage the business by grouping its country operations and categories into a four-quadrant matrix (outlined below) - based upon their growth potential and profit contribution. Each quadrant has a different strategy, designed to maximise their performance.
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EMERGING |
GROWTH |
Growth Potential |
HIGH |
· Categories: - Pest - Hygiene · Geographies: - Asia - Mid East, N Africa, Turkey - Latin America - Africa - Mexico |
· Categories: - Pest - Hygiene - Cleanroom (Workwear) · Geographies: - North America - UK - Germany, Austria Switzerland - Caribbean |
MED LOW |
· Categories: - Ambius (Plants) · Geographies: - Ireland - Spain - Portugal - Italy - Greece |
· Categories: - Hygiene - Workwear · Geographies: - France, Benelux - Nordics - Australia, New Zealand, Fiji - South Africa |
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MANAGE FOR VALUE |
PROTECT AND ENHANCE |
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LOW MED HIGH |
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Profit Contribution |
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www.rentokil-initial.com
Investor / Analyst enquiries:
Katharine Rycroft, Investor Relations Rentokil Initial plc 07811 270 734
Media enquiries:
Malcolm Padley, Corporate Communications Rentokil Initial plc 07788 978 199
