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.

The Potomac Company (www.potomaccompany.com) is leading investment banking firm with a particular focus on the pest control industry. For a complimentary report on valuing and selling your pest control business, please send an email to pco@potomaccompany.com.