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Rollins weighing a potential sale: Bloomberg
Posted on Friday, 05 June 2020 10:17
US-based pest control services provider Rollins is exploring strategic options that include a potential sale, people with knowledge of the matter told Bloomberg.
According to these sources, the group is working with unnamed financial advisors to figure out the best outcome for the business and its shareholders.
However, no formal auction process has started as of yet and therefore the insiders cautioned Rollins may decided to stay independent.
Shares in the company closed down 2.4 per cent to USD 43.52 yesterday, giving the firm a market capitalisation of USD 14.26 billion.
Rollins did not respond to Bloomberg’s requests for comment.
The company is billed as an essential service provider during the coronavirus pandemic lockdown.
Rollins provides its services to over two million customers through subsidiaries Orkin, AllPest and Critter Control.
It has over 200 franchises in 700 locations across the US.
Rollins posted revenue of USD 487.90 million in the three months ended 31st March 2020, up 13.7 per cent from USD 429.07 million in the corresponding period of 2019.
Net income declined slightly to USD 43.27 million in Q1 2020 (Q1 2019: USD 44.23 million).
At the time it announced its financials, Gary Rollins, chief executive, said: “It is difficult to know when the economy might rebound and the financial crisis will end; however we have taken proactive steps including but not limited to furloughs, selected pay reductions, and the reduction of non-essential expenses.
“In addition to our launch of VitalClean in our commercial branches, we are entering into our termite and mosquito seasons, which will provide revenue building opportunities.
“We are well positioned to adjust our business further if necessary, to meet the unique challenges we may face."
Zephyr, the M&A database published by Bureau van Dijk, shows there have been ten deals targeting exterminators and pest control service providers announced worldwide in 2020 to date.
Rollins featured in the largest of these as Select Equity Group disclosed a stake in the company worth USD 197.43 million.
UK-based Rentokil Initial, China’s Shandong General Aviation Service and US-headquartered Sentinel Pest Management, among others, have also been targeted in 2020 to date.
© Zephus Ltd