While low pricing may make you very competitive in your local market today, it’s going to clobber you when it comes time to sell your business.

Customer pricing is a very important consideration in the acquisition of a pest control company, and very little is said about it until it’s way too late to do anything. Are you a PCO who is focused on growing sales at all cost? Better listen up now, or start saving a bigger chunk of your paycheck for retirement… you’ll need it. (more…)

Does it ever make sense to take stock instead of cash when selling your company? For as long as the public equity markets have existed, public companies have used their stock as currency to make acquisitions. While the days of all-stock deals (pooling of interest) have more or less vanished, there does seem to be at least one public company in the pest control industry that has been effective in convincing sellers to take its stock (along with cash) in return for their companies: Sunair Services Corporation. Because Sunair is a public company, we can look to the public equity markets as a barometer of what the investing public thinks of Middleton’s acquisitions.
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At 2PM on Friday we told the two key managers (General Manager and VP of Sales) that we would be closing the sale of the business to a large regional pest control company in exactly one week.  The managers, understanding how important they were to the health of the company, soon realized that they possessed a tremendous amount of leverage.  Within 48 hours, they informed us that they would walk out the door unless we provided them a legal document promising a combined total of $500,000 at the closing table. At the start of the process, we knew that this could become a problem.  Because we didn’t have enough time to plan appropriately, we were very careful to make sure that the definitive purchase agreement signed by both buyer and seller clearly stated: (more…)

On January 24th, 2006, slightly more than three weeks into the New Year, one of the largest pest control companies in Europe, Rentokil Initial, announced its aggressive acquisition of J.C. Ehrlich Company, the 4th largest pest control company in the United States. The Reading, PA-based J.C. Ehrlich is the largest independently owned pest control company in the U.S. according to the PCT Top 100 list. While the pest control industry saw an active acquisition market in 2005, this year may prove to be stronger. A combination of various market forces has contributed to this consolidation: strong growth in industry demand, low capital gains tax rates, low cost of capital, and high valuations. (more…)