Corinne S Kennedy|Memphis Commercial Appeal
Memphis-basedTerminix will bepurchased by Rentokil Initial, a United Kingdom-based global pest control business, for $6.7 billion.
The acquisition was announced early Tuesday.
The transaction will "create the global leader in pest control,"according to a news release.
The deal is expected to close in the second half of 2022, subject to approval by regulators andshareholders of both companies.
A Terminix spokesperson said it is too early to say exactly what the impacts on the company's Memphis presence may be,Rentokil has committed to retaining a presence in Memphis, along with Reading, Pennsylvania, and Charlotte, North Carolina.
"The combined company will have a more comprehensive service offering across residential and commercial pest management — both locally and around the world," a spokesperson said in a statement. "Terminix will also be better positioned as part of a larger organization with global scale to invest in growth and technology, while providing leading-edge pest management solutions and best-in-class service for our customers."
Rentokil operates in 87 countries and has more than 44,000 employees globally.
According to its 2020 annual report, Terminix had 11,400 employees worldwide, with 2.9 million customers in 24 countries and territories. The company currently has about 1,000 employees in Memphis, according to a spokesperson.
Combined, the two companies in 2020 served 4.9 million customers, had $5.7 billion in revenue and free cash flow of more than $600 million. In the U.S. the company would be about a $3 billion enterprise, two-thirds of which would would be Terminix.
The new company will be traded on both the New York Stock Exchange and the London Stock Exchange.
Terminix shareholders can elect to receive all cash or all stock in the deal, with each share valued at about $55.
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Terminix CEOBrett Ponton said the deal was a step toward Terminix becoming a global leader in pest control.
"As part of a larger and stronger (organization), we will offer superior service and an even more comprehensive range of solutions for our customers, while accelerating our investments in growth and technology," he said. "Leveraging our strong combined residential and commercial capabilities and enhanced customer density will bring us closer to our customers and improve the quality of service we provide to our customers."
Rentokil officials also praised the deal.
"The Board of Rentokil Initial and I are delighted to recommend this transformational combination which will create the global leader in Pest Control and Hygiene & Wellbeing," said Richard Solomons, chairman of Rentokil Initial. "We believe the combination is a compelling opportunity for all stakeholders to participate in the value creation of the Combined Group."
Ted Townsend, chief economic development officer for the Greater Memphis Chamber, said Terminix "is a deeply valued member of the Memphis business community and we're looking forward to seeing the company continue to thrive here under its new ownership."
Terminix in Memphis
In October 2020,Atlanta-based Roark Capital Management LLC took control of ServiceMaster Brands in a$1.55 billion buyout of the then-Memphis-based business. After the sale of ServiceMaster Brands fromServiceMaster Global Holdings Inc., ServiceMaster Global wasrenamed Terminix Global Holdings Inc.
The buyout was the completion of the dismantling of ServiceMaster Global, which had moved to the Bluff City from the Chicago area in 2007.TruGreen and American Home Shield were two of the stand-alone businesses spunout of ServiceMaster Global over the years.
Terminix, which was founded in Memphis in 1927, was the largest business withinServiceMaster Global. Its headquarters are currently located in Downtown Memphis.
ServiceMaster Brands in March announced it would move its headquarters from Memphis to Atlanta.
Corinne S Kennedy covers economic development, healthcare and soccer for The Commercial Appeal. She can be reached via email at Corinne.Kennedy@CommercialAppeal.com.
