Creating the Global Leader in Pest Control
and Hygiene & Wellbeing
- Increased scale and leadership in the global pest control
market
- Substantially increased scale in North America, providing an
enlarged platform for profitable growth
- A complementary and synergistic portfolio
combination
- An attractive financial profile
Terminix Global Holdings, Inc.(NYSE: TMX) and Rentokil Initial
plc:
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20211213006135/en/
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
AND THE PERSON RESPONSIBLE FOR MAKING THIS ANNOUNCEMENT IS DARAGH
FAGAN, GENERAL GROUP COUNSEL AND COMPANY SECRETARY, RENTOKIL
INITIAL PLC.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION,
IN WHOLE OR IN PART, IN OR INTO ANY JURISDICTION WHERE TO DO SO
WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION.
THIS ANNOUNCEMENT IS NOT A PROSPECTUS AND THIS
ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE
CONSTRUED AS, ANY OFFER, INVITATION OR RECOMMENDATION TO PURCHASE,
SELL OR SUBSCRIBE FOR ANY SECURITIES IN ANY JURISDICTION AND
NEITHER THE ISSUE OF THE INFORMATION NOR ANYTHING CONTAINED HEREIN
SHALL FORM THE BASIS OF OR BE RELIED UPON IN CONNECTION WITH, OR
ACT AS AN INDUCEMENT TO ENTER INTO, ANY INVESTMENT ACTIVITY.
THIS IS AN ANNOUNCEMENT AND ANY DECISION TO
PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE
DISPOSE OF ANY SECURITIES MUST BE MADE ONLY ON THE BASIS OF THE
INFORMATION CONTAINED IN AND INCORPORATED BY REFERENCE INTO THE
PROSPECTUS ONCE PUBLISHED. THIS ANNOUNCEMENT IS NOT A CIRCULAR OR
EQUIVALENT DOCUMENT AND INVESTORS AND PROSPECTIVE INVESTORS SHOULD
NOT MAKE ANY INVESTMENT DECISION ON THE BASIS OF ITS CONTENTS. A
CIRCULAR AND PROSPECTUS IN RELATION TO THE TRANSACTION DESCRIBED IN
THIS ANNOUNCEMENT WILL EACH BE PUBLISHED IN DUE COURSE.
Transaction summary
The Boards of Directors of Rentokil Initial plc ("Rentokil
Initial") and Terminix Global Holdings, Inc. ("Terminix") are
pleased to announce that Rentokil Initial and Terminix have entered
into a definitive agreement (the “Agreement”) under which Rentokil
Initial will acquire Terminix for stock and cash (the “Combination”
or the “Transaction”). The Transaction will bring together two
complementary businesses (the "Combined Group") to create the
global leader in pest control and hygiene & wellbeing, and the
leader in the pest control business in North America, the world’s
largest pest control market.
Under the terms of the Agreement, Rentokil Initial will issue to
Terminix shareholders at closing aggregate consideration comprised
of approximately 643.29 million new Rentokil Initial shares
(representing approximately 128.66 million American depository
shares (“ADSs”), based on a 1:5 ADS to Rentokil Initial share
ratio) and approximately US$1.3bn in cash. Based on Rentokil
Initial’s 5-day average daily volume weighted share price and the
5-day average of the Sterling-US Dollar exchange rate both over the
period spanning 6 to 10 December 2021 inclusive, this values the
entire share capital of Terminix at US$6.7billion, implying a value
of US$55.00 per share of Terminix common stock, and represents an
aggregate consideration mix of 80% stock and 20% cash and:
- a premium of 47.0% over the closing price of Terminix common
stock on 13 December 2021 (being the last trading day prior to this
announcement); and
- a premium of 32.5% over the 90-day volume weighted average
share price of Terminix ending on 13 December 2021.
Terminix shareholders may elect to receive all cash or all stock
consideration, subject to proration in the event of
oversubscription. Each Terminix share for which no election or an
invalid election is received will be deemed to have elected for all
stock consideration.
The value of the per share cash election and the value of the
per share stock election will be equalised ahead of closing such
that the value of each election choice will be substantially the
same.
The total number of new Rentokil Initial ADSs to be issued and
the aggregate amount of cash to be paid under the terms of the
Agreement will not vary as a result of individual election
preferences.
As part of the Combination, Rentokil Initial will list the
American Depository Receipts (“ADRs”) evidencing the ADSs on the
New York Stock Exchange (“NYSE”). The Combination will result in
Terminix’s existing shareholders owning approximately 26% of the
Combined Group on completion and sharing the benefits accruing to
the Combined Group.
The Transaction will combine two leading brands with a long
cultural heritage, outstanding talent and strong focus on people,
customers and ESG. Upon completion, the Combined Group will have
c.56,000 colleagues serving c.4.9m customers around the world from
790 locations. The enlarged business will have a strong platform
for growth, particularly in North America, and an attractive
financial profile to support future growth, including through
acquisitions and continued investment in innovation and technology.
For the year ended 31 December 2020, the Combined Group's pro forma
revenue would have amounted to US$5.7bn1 (£4.3bn), with EBITDA of
US$1.2bn (£897m) and Free Cash Flow of US$608m (£458m).
The Combination is expected to create significant value, enhance
long-term growth potential, be highly cash generative and present a
compelling industrial logic, supported by:
- increased scale and leadership in the global pest control
market;
- substantially increased scale in North America, providing an
enlarged platform for profitable growth;
- a complementary and synergistic portfolio combination; and
- an attractive financial profile.
The Combination is expected to generate material annual pre-tax
net cost synergies of at least US$150m (£113m) by the third full
year post completion. Run rate synergies are expected to accumulate
c.30%, c.80% and 100% in the first, second and third 12-month
periods respectively, post completion. In achieving these
synergies, the Combined Group expects to incur aggregate cash
implementation costs of approximately US$150m, half of which will
be incurred in the first 12 months post completion. The Transaction
is expected to deliver mid-teens percent accretion to Rentokil
Initial’s earnings per share in the first full year post
completion2.
Recommendations
The Boards of Directors of both Terminix and Rentokil Initial
have unanimously approved the Transaction and resolved to recommend
that their respective shareholders vote in favour of it.
Current trading
Rentokil Initial and Terminix each confirm that current trading
is in line with expectations.
Commenting on today’s announcement, Richard Solomons,
Chairman of Rentokil Initial, said:
“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. Under Andy
Ransom’s leadership, our Combined Group will have a highly talented
and experienced management team able to more effectively create
value and enhance long-term growth. We believe the combination is a
compelling opportunity for all stakeholders to participate in the
value creation of the Combined Group.”
Commenting on today’s announcement, Andy Ransom, CEO of
Rentokil Initial, said:
“This is an exciting and transformational combination that will
create the global leader in commercial, residential and termite
pest control, and a leader in North America, the world’s largest
pest control market. It brings together c.56,000 colleagues,
protecting people, enhancing lives in over 87 countries, and
serving c.4.9m customers.
“These are two highly complementary businesses with a similar
operational playbook focused on supporting great people to provide
outstanding customer service across Pest Control and Hygiene &
Wellbeing. The combination will deliver further investment and the
sharing of best practices to enable our talented teams to better
serve customers, protecting them from the growing threat of pests
and meeting their future needs. We will open our first innovation
centre in the US and provide our industry-leading innovations and
digital technologies to a far larger customer base. This is a
win-win-win for colleagues, customers and shareholders.”
Commenting on today’s announcement, Naren Gursahaney,
Chairman of Terminix, said:
“On behalf of the Board of Terminix, I enthusiastically support
this complementary combination of two phenomenal pest management
companies. Our Board of Directors is confident that Rentokil
Initial is the perfect partner for Terminix and that this
Transaction will maximize value for Terminix’s customers, teammates
and stockholders. The Transaction delivers a compelling 47.0%
premium for Terminix’s stockholders, and the equity consideration
will allow Terminix stockholders to participate in and benefit from
the substantial upside potential of the combined company. The
Terminix Board of Directors has unanimously determined that this
highly complementary combination is a win for, and in the best
interests of, all of our stakeholders. The combined company will be
differentiated by its strong focus on people, customers and ESG and
well-positioned to drive continued growth and value creation.”
Commenting on today’s announcement, Brett Ponton, CEO of
Terminix, said:
“This is an exciting next step that significantly advances
Terminix’s journey toward becoming a global leader in pest
management. As part of a larger and stronger organisation, we will
offer superior service and an even more comprehensive range of
solutions for our customers, while accelerating our investments in
growth and technology. I look forward to the opportunity this
combination provides for our colleagues and customers. The shared
cultural focus on providing our people with the training, tools,
and technology necessary to provide world-class customer service
will provide new opportunities for our teammates to develop as part
of the worldwide leader in pest control. 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.”
Analyst and Investor Presentation
There will be an analysts' and investors' conference call and
webcast presentation at 9.00am GMT today, hosted by Rentokil
Initial’s management. This will be available via a live audio web
cast at www.rentokil-initial.com and on www.terminix.com. Rentokil
Initial management will also host a second conference call and a
webcast presentation will be given at 1.00pm GMT (8.00am
EST). This will be available via a live audio web cast at
www.rentokil-initial.com. An audio recording will be available at
www.rentokil-initial.com for the foreseeable future.
Background
Under current management Rentokil Initial has increasingly
focused the business on Pest Control and Hygiene & Wellbeing.
For the period from 2013 to 2020, Rentokil Initial delivered a
seven-year compound annual growth rate (CAGR) of 9.9% in Ongoing
Revenue, a seven-year CAGR of 15.2% in Ongoing Operating Profit,
and improved Net Operating Margins from 9.8% to 13.7%. During this
period the Group has also increased dividend payments from 2.31p
per share in 2013 to 5.41p per share for the full year ended
December 2020. The business has also consistently executed a highly
value creating programme of acquisitions and since 2016 has
acquired 228 businesses (primarily in pest control), 73 of which
have been in North America.
Terminix is the most recognised brand in U.S. termite and pest
management services and is now a singularly focussed pest
management company, with a low cost structure and strong balance
sheet.
Rentokil Initial and Terminix are significant players in the
attractive, non-cyclical and growing pest control industry. The
global pest control market, estimated to be worth c.US$22bn in 2020
(51% in North America, 20% Europe, 21% Asia), has delivered a total
market CAGR of 4.7% over the last five years and is estimated to
grow at between 4.5% and 5%+ over the medium term.
Pest Control is a largely non-discretionary and essential
service and industry growth opportunities show no signs of being
diminished by the COVID-19 pandemic. Growth characteristics of the
global pest control market include increasing global populations,
urbanisation, expansion of middle classes, climate change, greater
intolerance to pest incidence and rising transmission of vector
borne diseases. Technology developments are also important factors
contributing to future pest management growth, including rising
demand for remote monitoring systems.
Creating the global leader in pest control
The Boards of Directors of Rentokil Initial and Terminix believe
the Transaction has a highly compelling industrial logic:
•
Increased scale and leadership in the
global pest control market
Combined, the two businesses will become
the leading global pest control company, with a customer base of
c.4.9m customers, c.56,000 colleagues globally and presence in 790
locations in over 87 countries. The significantly enhanced network
and route density will bring the Combined Group closer to its
customers, with its colleagues and teammates able to spend more
time directly with customers and less time driving to and from
customer visits. Pro forma revenues for the Combined Group would
have been US$5.7bn (£4.3bn) for the full year ended December 2020,
75% of which would have been generated from pest control (for the
full year 2020, 62% of Rentokil Initial’s revenues were from pest
control).
•
Substantially increased scale in North
America, providing an enlarged platform for profitable
growth
The Combined Group will become the leading
player in North America, the world’s largest pest control market
(representing 51% of the global market and estimated to be worth
c.US$11bn). As such, North America is of significant strategic
importance and focus for Rentokil Initial. It is a highly
competitive and fragmented market comprising over 20,000 pest
control companies. Commercial pest control comprises the largest
segment in North America at c.45% of the market, with residential
comprising c.35% and termites at c.20%. Rentokil Initial is
currently a leading brand in commercial pest control, whilst
Terminix is the most recognised brand for termite and pest
management in the US, performing c.50,000 customer visits each day
from 375 locations across 47 states. It generated pest control
revenues of c.US$1.9bn for the year to 31 December 2020. Post
completion, the Combined Group will include a leading brand for
residential and termite pest control in North America, as well as
the leading global brand in commercial pest control.
Upon completion of the Transaction, c.60%
of the Combined Group’s total revenues will come from North
America. The Combination will create additional scale which will
enable further investments in people, service quality, innovation,
digital technology & applications and sustainability, to meet
the future needs of customers and colleagues. Post completion,
Terminix and Rentokil Initial intend to open a new science and
innovation centre in the US focused on termite and residential pest
control.
•
A complementary and synergistic
combination
The Combination brings together two
complementary businesses with a strong operational and cultural
fit, creating significant synergy opportunities.
Rentokil Initial and Terminix have
complementary service lines (combining Rentokil Initial’s expertise
in commercial pest control globally with Terminix’s expertise in
residential and termite pest control in North America). Their
geographic footprints in North America are also complementary,
allowing greater route-density to be achieved, presenting further
opportunities to enhance operational efficiency. Both companies
have similar operating models which will enable the effective
sharing of best practices in the future. In addition, Rentokil
Initial is a leader in innovation and digital technology, creating
services and products which can be rolled out to Terminix’s c.2.9m
pest control customers.
Both companies have a strong track record
of integrating acquisitions and are committed to creating a
high-quality working environment with attractive opportunities for
colleagues and teammates from both businesses to develop rewarding
long-term careers in the Combined Group. Rentokil Initial and
Terminix believe the enlarged business will be able to further
differentiate itself from its competitors through its strong focus
on people, customers and ESG. (More details on this are given in
the ‘Benefits to the Combined Group’s customers’ and ‘Benefits to
the Combined Group’s employees’ sections of this announcement.)
The Combination is expected to generate
material annual pre-tax cost synergies of at least US$150m (£113m)
by the third full year post completion, owing to greater footprint
density, procurement leverage, property rationalisation, duplicate
administrative and overhead rationalisation, marketing, sales
effectiveness, head office synergies and financing. (See
‘Delivering significant value for shareholders’ for further
details.)
•
An attractive financial profile
The Combined Group will have an attractive
financial profile, with the opportunity to increase Group Net
Operating Margins through cost reductions and operational
efficiencies by c.100bps in each of the three full calendar years
post completion. A strong balance sheet will support growth through
continued investments in people, innovation, digital technologies
and sustainability, and through further M&A opportunities
around the world. The Combined Group will be highly cash generative
and on a pro forma basis would have generated Free Cash Flow of
£458m for the year ended 31 December 2020.
The Combination will create a larger,
highly diversified and more resilient business in Pest Control and
Hygiene & Wellbeing. In North America Pest Control, it will be
well balanced between residential and termite (60% of revenues) and
commercial (40% of revenues) pest services. Revenues from termites,
currently 47% of Terminix’s residential pest revenues, will become
c.20% of the Combined Group’s North America pest business upon
completion of the Transaction.
The Combined Group will also have a
strong, complementary international Hygiene & Wellbeing
business, with leading positions in 22 of its 65 markets. Revenues
from Hygiene & Wellbeing will form 21% of total Combined Group
revenues and the category is expected to deliver 4% to 6% Organic
growth per annum over the medium term from 2022. The Board of
Rentokil Initial remains committed to the growth and development of
this business which it believes has the potential to become ‘The
New Pest Control’. Terminix and Rentokil Initial will target the
opportunity to cross-sell and up-sell both Pest Control and Hygiene
& Wellbeing services to its enlarged customer base going
forward.
Following completion of the Combination,
Rentokil Initial will continue to target the medium-term growth
rates set out at its Capital Markets Day on 28 September 2021.
These are Ongoing Revenue growth of 6% to 9%, including Organic
growth of 4% to 5%, Ongoing Operating Profit growth of 10%+ and
Free Cash Flow conversion of c.90%. The medium-term Organic growth
target for the Combined Group’s Pest Control category will remain
unchanged at 4.5% to 6.5%. Medium-term growth targets for the
Combined Group’s Hygiene & Wellbeing and Workwear categories
will also remain unchanged at 4% to 6% and 3% to 4%
respectively.
The Combined Group will remain committed
to Rentokil Initial’s current progressive dividend policy and
expects to have leverage metrics consistent with a BBB investment
grade rating within two years from completion of the Combination.
Net Debt to EBITDA is targeted to be 2.0x to 2.5x in the medium
term.
Terms of the Agreement
Under the terms of the Agreement, Rentokil Initial will issue to
Terminix shareholders at closing aggregate consideration comprised
of approximately 643.29 million new Rentokil Initial shares
(representing approximately 128.66 million ADSs based on a 1:5 ADS
to Rentokil Initial share ratio) and approximately US$1.3bn in
cash. Based on Rentokil Initial’s 5-day average daily volume
weighted share price and the 5-day average of the Sterling-US
Dollar exchange rate both over the period ending 10 December 2021,
this values the entire share capital of Terminix at US$6.7bn,
implying a value of US$55.00 per share of Terminix common stock,
and represents an aggregate consideration mix of 80% stock and 20%
cash and:
- a premium of 47.0% over the closing price of Terminix common
stock on 13 December 2021 (being the last trading day prior to this
announcement); and
- a premium of 32.5% over the 90-day volume weighted average
share price of Terminix ending on 13 December 2021.
Terminix shareholders may elect to receive all cash or all stock
consideration, subject to proration in the event of
oversubscription. Each Terminix share for which no election or an
invalid election is received will be deemed to have elected for all
stock consideration.
The cash election consideration and the stock election
consideration will be equalized to the value of the aggregate
consideration per Terminix share, as measured by the value of
5.3094 new Rentokil Initial shares and $11 in cash as of the second
day prior to closing.
The total number of new Rentokil Initial ADSs to be issued and
the aggregate amount of cash to be paid under the terms of the
Agreement will not vary as a result of individual election
preferences.
As part of the Combination, Rentokil Initial will list ADRs
evidencing the ADSs on the NYSE. The Combination will result in
Terminix’s existing shareholders owning approximately 26% of the
Combined Group on completion and sharing the benefits accruing to
the Combined Group.
Delivering significant value for shareholders
Terminix and Rentokil Initial believe that the Transaction will
create significant value for shareholders, who will be able to
participate in the Combined Group’s continued success through their
ownership in the global leader in a high-quality growth market.
•
The Combination is expected to deliver
substantial value creation for shareholders from annualised pre-tax
net cost synergies of at least US$150m (£113m) by the end of year
three post completion. Run rate synergies are expected to
accumulate c.30%, c.80% and 100% in the first, second and third
12-month periods respectively, post completion.
•
In achieving these synergies, the Combined
Group expects to incur aggregate cash implementation costs of
approximately US$150m, half of which will be incurred in the first
12 months post completion.
•
Synergies will be achieved through
operational and route density, procurement leverage, property
rationalisation, reduced corporate costs and efficiencies in
administrative functions and overheads. Savings can also be made in
marketing and sales effectiveness and by leveraging the best of
both companies’ technology and IT systems. A breakdown is given
below:
•
back office synergies from reduced
corporate costs, and scale efficiencies in administrative functions
and overheads, will represent c.50% of total synergies; and
•
combining our branches and routes will
drive service productivity and savings in property costs; this will
represent the remaining c.50% of total synergies.
•
Additional (non-operating) synergies of
$11m, including costs of financing reductions.
The Transaction values Terminix at: 19.3x
2021E consensus EBITDA pre synergies; and 13.9x 2021E consensus
EBITDA pro forma for aggregate cost synergies across the Combined
Group of $150m.
The Combination is also expected to be
mid-teens percent accretive to Rentokil Initial’s earnings per
share in the first full financial year following completion3.
The Combined Group’s margin profile and
operating scale efficiencies are expected to enable it to reduce
its costs and increase overall efficiencies, creating flexibility
for it to deploy capital strategically and drive value for
shareholders, including pursuing bolt-on and new-entry acquisition
opportunities that will extend the Combined Group’s capabilities
into new markets, segments and cities of the future.
The Combined Group is expected to be
highly cash generative. It will remain committed to Rentokil
Initial’s progressive dividend policy and expects to have leverage
metrics consistent with a BBB investment grade rating within two
years from completion of the Combination. Net Debt to EBITDA is
targeted to be 2.0x to 2.5x in the medium term.
The Combined Group would have generated
total revenues of US$5.7bn in 2020, EBITDA of $1.2bn and an EBITDA
margin (excluding synergies) of 20.9%, and Free Cash Flow
US$608m.
Benefits for the Combined Group’s customers
Upon completion of the Combination, the Combined Group will have
c.4.9m customers and a shared commitment to providing the highest
levels of customer satisfaction and to developing new, innovative
ways to better serve its customer base. Its aim is to achieve this
through:
•
Highly trained experts - through the
Combined Group’s commitment to training and development, together,
it will provide customers with best in class levels of service.
Service performance and customer satisfaction will be consistently
monitored and recorded, reported to the Board and published
annually in the Combined Group’s Annual Report;
•
Providing additional services to existing
customers - post completion, the Combined Group will jointly
examine opportunities to upsell more solutions to its enhanced
customer base and the potential for cross sell, for instance,
Hygiene & Wellbeing products and services to Terminix
customers;
•
Access to innovation and digital solutions
- Rentokil Initial has excellent levels of capability in innovation
and proven, digital pest management tools which it will offer to
the Combined Group’s enlarged customer base through a series of
product and service launches. These include proprietary connected
products for rodent control and digital portals offering customers
24/7 access to service information. Rentokil Initial continues to
focus on the global roll out of PestConnect, its digital pest
control system, and by 30 June 2021 it had installed over 200,000
units to customers in 28 countries. Rentokil Initial’s pipeline of
innovations includes new connected devices for flying insects as
well as crawling insects such as bed bugs. In addition, Rentokil
Initial will deploy its highly successful Command Centre to provide
data analytics to further enhance customer services. Rentokil
Initial has technology partnerships in place with global leading
companies and is also in the early-stage development of new tools,
using rich media and artificial intelligence to further enhance its
pest control offering;
•
New US science and innovation centre to be
opened - post completion, the Combined Group intends to invest in a
new science and innovation centre, based in the US, and which will
focus on termite and pest control solutions. This will be designed
to complement Rentokil Initial’s existing UK-based centres for
innovation (the Power Centre) and new technology and product
testing;
•
Capitalising on shared strengths and
expertise - the Combined Group will have complementary strengths
and capabilities, such as Terminix’s expertise in termite and
residential pest control and Rentokil Initial’s expertise and
global footprint in commercial pest control. The enlarged business
will utilise shared best practices and ‘best of the best’ ways of
working to benefit its customers;
•
Investment in combined customer experience
technologies - learning from the Combined Group’s technology
platforms and IT expertise, the enlarged business will invest in
high quality customer experience technologies, designed to improve
both customer experience and touch points;
•
Benefits of scale - the Combined Group’s
additional scale will enable further investments in people, service
quality, innovation, digital and sustainability to meet the future
needs of customers and communities. It will continue to work with
third-party suppliers to introduce new innovations to its enlarged
customer base; and
•
Supporting customers’ sustainability plans
- as a responsible supplier to multiple customer sectors, the
Combined Group will continue to develop new products and services,
using shared expertise to reduce its customers own environmental
footprint. These include new products which use fewer chemicals or
generate lower levels of carbon emissions than traditional units.
The Combined Group will be committed to supporting independent ESG
indices and providing environmental and social data to help
customers choose their responsible suppliers, and to support other
stakeholders.
Benefits for the Combined Group’s employees
The Combined Group presents additional opportunities for its
c.56,000 employees and will introduce a set of commitments to all
colleagues and teammates as set out below.
1.
Safety will remain the top priority for
all employees - the Combined Group will measure Lost Time Accident
rates and Working Days Lost and implement best practices from
across the Combined Group to enhance safety, which will continue to
be the first item on every management agenda.
2.
Creating an enhanced Employer of Choice
programme – the Combined Group will work together to share best
practices from across the enlarged organisation to recruit, train
and retain its people more effectively, provide line managers with
support and training, and ultimately ensure all colleagues and
teammates have the opportunity to benefit from a long and
successful career within the enlarged business. The Combined Group
will work to create a culture that is inspiring, encouraging and
proactive, and one in which achievements are celebrated and
rewarded. Great teamwork will be central to the Combined Group’s
future success.
3.
Culture and engagement – the Combined
Group will place great importance on respect and the diversity,
equality and inclusion of its people. It will continue to support
with pride veterans who deserve special appreciation and will
remain committed to acting responsibly for all colleagues,
customers, suppliers and business partners.
4.
Open and honest communication – the
Combined Group will commit to regular communication with its
colleagues and teammates and will continue to listen actively to
them through regular surveys, town hall meetings and webinars. In
addition, it will establish employee forums for colleagues to
engage with initiatives and ways of working that can support the
future growth and success of the group. The Combined Group will
consider carefully and explain to its colleagues key decisions on
its strategy, people, infrastructure, systems and services. As the
Combined Group grows, it expects over time to employ more people
and, whilst in the short term there will be some reduction in
duplicate roles, the majority of these will come from not replacing
those who leave the Combined Group. The Combined Group will measure
and set targets to achieve high levels of sales and service
colleague retention.
5.
Retained commitment to main US locations –
the Combined Group will maintain its presence in Memphis, TN,
Reading, PA and Charlotte, NC and will continue to support their
local communities there, and maintain branches throughout the
US.
6.
Continuing to invest in the Terminix brand
– the transaction will enhance Terminix’s ability to compete for
residential and termite pest control customers in North America,
while Rentokil Initial will increase Terminix’s ability to compete
for commercial pest control customers. Innovating and finding new
and more sustainable ways of working will be a key component of the
enlarged business’s strategy going forward. The purpose of the
Combined Group will be to ‘Protect People and Enhance Lives’ and it
aims to deliver this through outstanding people delivering best in
class service.
7.
Tools to get the job done – the Combined
Group will adopt a pragmatic ‘best of the best’ approach to
identifying which tools to use going forward. This includes
investing in a combined IT system to make the enlarged business
more effective and efficient for its people and customers. Added
scale will also allow the Combined Group to continue to invest in
new tools, including digital systems and services.
8.
Being part of a local-global family – the
Combined Group will learn from its colleagues and customers locally
and globally, providing job opportunities across town, state,
country and the world.
9.
Becoming more sustainable – Rentokil
Initial and Terminix have both begun their journey towards a more
environmentally-friendly future and together will join forces to
share collective expertise. Focus areas include the introduction of
non-toxic products, the use of digital services requiring fewer
chemicals, greater route density leading to more eco-efficient
driving, deployment of an ultra-low emissions fleet and reduced
waste and packaging. The Combined Group will commit to becoming a
net zero carbon emissions company by 2040.
10.
Supporting communities and charities – the
Combined Group will be passionate about supporting the communities
in which it operates and helping charitable causes through its
people and donations. This will be an important part of its plan to
become a responsible employer of choice.
Post completion, Rentokil Initial and Terminix will engage with
its colleagues and teammates to build on these commitments as part
of an overall goal to become a world-class employer of choice.
Governance, management and listing
Both Rentokil Initial and Terminix are built on the strength of
their people which is the single most important asset to each
business. As service organisations, both rely on the commitment and
ability of colleagues and teammates to deliver the highest levels
of service. The Combined Group, led by a proven and senior
management team, will draw on the array of talent and experience
from both organisations to further develop the business.
Upon completion, it is intended that the Combined Group's Board
will comprise as follows:
- Richard Solomons, currently Chairman of Rentokil Initial, who
will be Chairman of the Combined Group;
- Andy Ransom, currently CEO of Rentokil Initial, who will be CEO
of the Combined Group;
- Stuart Ingall-Tombs, currently CFO of Rentokil Initial, who
will be CFO of the Combined Group; and
- Five non-executive directors who currently make up the Board of
Rentokil Initial; and
- One non-executive director from the Board of Terminix.
Together, these individuals will create a diverse nine-member
Board drawing on the expertise and experience of both
companies.
The Combined Group will be incorporated, headquartered and
domiciled in the UK, retaining Rentokil Initial’s listing on the
premium segment of the Official List of the Financial Conduct
Authority (the “FCA”) and trading on the main market of London
Stock Exchange (the “LSE”). Reflecting the stock component of the
Combination to be issued to existing shareholders of Terminix,
Rentokil Initial will list its ADRs on the NYSE upon completion
following registration under US securities laws.
Conditionality and timing to completion
The parties expect the Transaction to close in the second half
of 2022 subject to, amongst other things:
- obtaining approval from the shareholders of both Rentokil
Initial and Terminix;
- obtaining regulatory approval in the US;
- approval of the new Rentokil Initial shares for listing on the
LSE and the Rentokil Initial ADSs on the NYSE; and
- other customary conditions for closing.
Completion of the Transaction is not subject to any financing
condition.
The Transaction is a Class 1 transaction for Rentokil Initial
for the purposes of the UK Listing Rules requiring the approval of
Rentokil Initial shareholders. A shareholder circular, together
with notice of the relevant shareholder meeting, will be
distributed to Rentokil Initial shareholders in due course.
Rentokil Initial will also publish a prospectus in connection with
the stock consideration to be issued to Terminix shareholders.
The Transaction terms provide that Terminix will be liable to
pay a break fee of US$200m to Rentokil Initial in certain specified
circumstances, including a change of Terminix’s board
recommendation or Terminix terminating the Agreement in order to
accept a superior proposal. Rentokil Initial will also be required
to pay Terminix a break fee of US$150m in certain specified
circumstances, including a change of Rentokil Initial’s board
recommendation.
In line with Rentokil Initial's undertakings to the CMA,
Terminix will dispose of its UK business prior to completion of the
Transaction.
Financing
Rentokil Initial has entered into a committed bridge facility
for up to $2.7 billion with Barclays to support the financing of
the cash consideration, refinancing of existing Terminix debt, and
to pay fees associated with the Transaction. In due course,
Rentokil Initial expects to refinance the bridge facility with
longer term financing from capital markets and a syndicated term
loan facility provided by a relationship bank group.
Employees
Under the terms of the Agreement, Rentokil Initial has agreed
that for 12 months following closing, it will provide the Terminix
employees with a base salary that is no less favourable than that
provided before closing and target cash and long-term equity
incentive opportunities that are in the aggregate substantially
comparable to those provided before closing.
Advisors to Rentokil Initial
Barclays Bank PLC (“Barclays”) is acting as sole sponsor, joint
financial advisor and joint corporate broker, and Goldman Sachs
International (“Goldman Sachs”) is acting as joint financial
advisor and joint corporate broker, in relation to the Transaction
described in this announcement. Davis Polk & Wardwell LLP and
Freshfields Bruckhaus Deringer LLP are acting as, respectively, US
and UK legal counsel to Rentokil Initial.
Advisors to Terminix
Lazard is acting as financial advisor to Terminix. Wachtell,
Lipton, Rosen & Katz and Macfarlanes LLP are acting as,
respectively, US and UK legal counsel to Terminix.
Enquiries:
Investors /
Analysts:
Katharine Rycroft
Rentokil Initial plc
+44 (0)7811 270734
Media:
Malcolm Padley
Richard Mountain
Rentokil Initial plc
FTI Consulting
+44 (0)7788 978199
+44 (0)7909 684466
Barclays (Joint Financial Advisor and Joint Corporate
Broker)
Gary Posternack, Mark Astaire, Omar Faruqui, Tom Macdonald
Goldman Sachs (Joint Financial Advisor and Joint Corporate
Broker)
Anthony Gutman, Diego Fortunati, Jimmy Bastock, Mitul Patel
Enquiries:
Terminix
Investors / Analysts: Jesse
Jenkins | Terminix | +1 901-597-8259 |
Jesse.Jenkins@terminix.com
Media: James Robinson |
Terminix | +1 901-597-7521 | James.Robinson@terminix.com Joele
Frank, Wilkinson Brimmer Katcher | Dan Moore / Andrew Siegel | +1
212-355-4449
About Rentokil Initial:
Founded in 1925, Rentokil Initial is a leader in the pest
control and hygiene & wellbeing service industry. The Company
has c.44,500 employees, and over 1,800 local service teams across
the world covering around 90% of global GDP in over 90 of the
world’s 100 largest cities across the US, Europe, UK, Asia, Pacific
and Rest of World. It operates in over 87 countries, with
approximately 90% of its revenues derived outside the UK. The
Company’s business model is focused on compounding revenue, profit
and cash growth through a combination of organic growth and
M&A.
About Terminix:
Terminix Global Holdings (NYSE: TMX) is a leading provider of
residential and commercial pest management. The Company provides
pest management services and protection against termites,
mosquitoes, rodents and other pests. Headquartered in Memphis,
Tenn., with more than 11,400 teammates and 2.9 million customers in
24 countries and territories, the Company visits more than 50,000
homes and businesses every day. It has scale and deep presence in
the U.S. with over 95% of revenues coming from the United States.
During 2020, Terminix generated a total revenue of US$1.96bn,
adjusted EBITDA of US$345m and profit from continuing operations
before income taxes of US$41m. As of September 30, 2021, Terminix
had gross assets of US$4.45bn. Terminix’s executive and senior
leaders are Brett Ponton (Chief Executive Officer), Robert Riesbeck
(Executive Vice President and Chief Financial Officer), David Dart
(Chief Human Resources Officer), Doug Hart (Vice President,
Terminix International), Dion Persson (Senior Vice President,
Special Projects), Deidre Richardson (Senior Vice President,
General Counsel and Corporate Secretary), Jim Summerville (Senior
Vice President, Supply Management) and Joy Wald (Senior Vice
President and Chief Information Officer).
Important notice
Barclays, who is authorised by the Prudential Regulation
Authority (the “PRA”) and regulated in the United Kingdom by the
Financial Conduct Authority (the “FCA”) and the PRA, together with
Goldman Sachs, who is authorised by the PRA and regulated by the
FCA and the PRA in the United Kingdom, are each acting exclusively
for Rentokil Initial and no one else in connection with the
Transaction and the matters referred to in this document and will
not regard any other person as a client in relation to the matters
set out in this document and will not be responsible to anyone
other than Rentokil Initial for providing the protections afforded
to their respective clients, nor for providing advice in relation
to the Transaction or any other matter referred to in this
document. Neither Barclays nor Goldman Sachs, nor any of their
respective subsidiaries, holding companies, branches or affiliates
owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client in
connection with the Transaction or any statement contained herein
or otherwise. Apart from the responsibilities and liabilities, if
any, which may be imposed on each of Barclays and Goldman Sachs by
the Financial Services and Markets Act 2000 (“FSMA”), or the
regulatory regime established thereunder, or under the regulatory
regime of any jurisdiction where exclusion of liability under the
relevant regulatory regime would be illegal, void or unenforceable,
neither Barclays nor Goldman Sachs nor any of their respective
affiliates accepts any responsibility or liability whatsoever for
the contents of this announcement, and no representation, express
or implied, is made by it, or purported to be made on its behalf,
in relation to the contents of this announcement, including its
accuracy, completeness or verification of any other statement made
or purported to be made by it, or on its behalf, in connection with
Rentokil Initial or the matters described in this announcement. To
the fullest extent permitted by applicable law, each of Barclays
and Goldman Sachs and each of their respective affiliates
accordingly disclaim all and any responsibility or liability
whether arising in tort, contract or otherwise (save as referred to
above) which they might otherwise have in respect of this
announcement or any statement contained therein.
Important additional information
Neither this announcement nor any copy of it may be taken or
transmitted directly or indirectly into or from any jurisdiction
where to do so would constitute a violation of the relevant laws or
regulations of such jurisdiction. Any failure to comply with this
restriction may constitute a violation of such laws or regulations.
Persons into whose possession this announcement or other
information referred to herein should inform themselves about, and
observe, any restrictions in such laws or regulations.
This announcement has been prepared for the purpose of complying
with the applicable law and regulation of the United Kingdom and
the United States and information disclosed may not be the same as
that which would have been disclosed if this announcement had been
prepared in accordance with the laws and regulations of
jurisdictions outside the United Kingdom or the United States.
Additional Information About The Proposed Transaction And
Where To Find It
In connection with the proposed transaction between Rentokil
Initial plc (“Rentokil Initial”) and Terminix Global Holdings, Inc.
(“Terminix”), Rentokil Initial will file with the U.S. Securities
and Exchange Commission (the “SEC”) a registration statement on
Form F-4, which will include a proxy statement of Terminix that
also constitutes a prospectus of Rentokil Initial. Each of Rentokil
Initial and Terminix will also file other relevant documents in
connection with the proposed transaction. The definitive proxy
statement/prospectus will be sent to the shareholders of Terminix.
Rentokil Initial will also file a shareholder proxy circular in
connection with the proposed transaction with applicable securities
regulators in the United Kingdom and the shareholder proxy circular
will be sent to Rentokil Initial’s shareholders. This communication
is not a substitute for any registration statement, proxy
statement/prospectus or other documents Rentokil Initial and/or
Terminix may file with the SEC in connection with the proposed
transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS,
INVESTORS, STOCKHOLDERS AND SHAREHOLDERS OF TERMINIX AND RENTOKIL
ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE PROXY
STATEMENT/PROSPECTUS AND SHAREHOLDER PROXY CIRCULAR, AS APPLICABLE,
AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED
WITH THE SEC OR APPLICABLE SECURITIES REGULATORS IN THE UNITED
KINGDOM, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE
DOCUMENTS, IN CONNECTION WITH THE PROPOSED TRANSACTION WHEN THEY
BECOME AVAILABLE, AS THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT TERMINIX, RENTOKIL INITIAL, THE PROPOSED
TRANSACTION AND RELATED MATTERS. The registration statement and
proxy statement/prospectus and other documents filed by Rentokil
Initial and Terminix with the SEC, when filed, will be available
free of charge at the SEC’s website at www.sec.gov. In addition,
investors and shareholders will be able to obtain free copies of
the proxy statement/prospectus and other documents filed with the
SEC by Terminix online at investors.terminix.com, upon written
request delivered to Terminix at 150 Peabody Pl., Memphis, TN
38103, USA, Attention: Corporate Secretary, or by calling
Terminix’s Corporate Secretary’s Office by telephone at +1
901-597-1400 or by email at deidre.richardson@terminix.com, and
will be able to obtain free copies of the registration statement,
proxy statement/prospectus, shareholder proxy circular and other
documents which will be filed with the SEC and applicable
securities regulators in the United Kingdom by Rentokil Initial
online at https://www.rentokil-initial.com, upon written request
delivered to Rentokil Initial at Compass House, Manor Royal,
Crawley, West Sussex, RH10 9PY, England, Attention: Katharine
Rycroft, or by calling Rentokil by telephone at +44 (0)7811 270734
or by email at katharine.rycroft@rentokil-initial.com.
This communication is for informational purposes only and is not
intended to, and shall not, constitute an offer to sell or buy or
the solicitation of an offer to sell or buy any securities, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
appropriate registration or qualification under the securities laws
of any such jurisdiction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section
10 of the U.S. Securities Act of 1933, as amended.
Participants in the Solicitation of Proxies
This communication is not a solicitation of proxies in
connection with the proposed transaction. However, under SEC rules,
Terminix, Rentokil Initial, and certain of their respective
directors, executive officers and other members of the management
and employees may be deemed to be participants in the solicitation
of proxies in connection with the proposed transaction. Information
about Terminix’s directors and executive officers may be found on
its website at
corporate.terminix.com/responsibility/corporate-governance and in
its 2020 Annual Report on Form 10-K filed with the SEC on February
26, 2021, available at investors.terminix.com and www.sec.gov.
Information about Rentokil Initial’s directors and executive
officers may be found on its website at
https://www.rentokil-initial.com and in its 2020 Annual Report
filed with applicable securities regulators in the United Kingdom
on March 31, 2021, available on its website at
https://www.rentokil-initial.com. These documents can be obtained
free of charge from the sources indicated above. Additional
information regarding the interests of such potential participants
in the solicitation of proxies in connection with the proposed
transaction will be included in the proxy statement/prospectus and
shareholder proxy circular and other relevant materials filed with
the SEC and applicable securities regulators in the United Kingdom
when they become available.
Information Regarding Forward-Looking Statements
This communication contains forward-looking statements as that
term is defined in Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can sometimes be identified by the use
of forward-looking terms such as “believes,” “expects,” “may,”
“will,” “shall,” “should,” “would,” “could,” “potential,” “seeks,”
“aims,” “projects,” “predicts,” “is optimistic,” “intends,”
“plans,” “estimates,” “targets,” “anticipates,” “continues” or
other comparable terms or negatives of these terms, but not all
forward-looking statements include such identifying words.
Forward-looking statements are based upon current plans, estimates
and expectations that are subject to risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those indicated or
anticipated by such forward-looking statements. We can give no
assurance that such plans, estimates or expectations will be
achieved and therefore, actual results may differ materially from
any plans, estimates or expectations in such forward-looking
statements. Important factors that could cause actual results to
differ materially from such plans, estimates or expectations
include: a condition to the closing of the proposed transaction may
not be satisfied; the occurrence of any event that can give rise to
termination of the proposed transaction; a regulatory approval that
may be required for the proposed transaction is delayed, is not
obtained or is obtained subject to conditions that are not
anticipated; Rentokil Initial is unable to achieve the synergies
and value creation contemplated by the proposed transaction;
Rentokil Initial is unable to promptly and effectively integrate
Terminix’s businesses; management’s time and attention is diverted
on transaction related issues; disruption from the proposed
transaction makes it more difficult to maintain business,
contractual and operational relationships; the credit ratings of
Rentokil Initial declines following the proposed transaction; legal
proceedings are instituted against Terminix or Rentokil Initial;
Terminix or Rentokil Initial is unable to retain or hire key
personnel; the announcement or the consummation of the proposed
acquisition has a negative effect on the market price of the
capital stock of Terminix or Rentokil Initial or on Terminix’s or
Rentokil Initial’s operating results; evolving legal, regulatory
and tax regimes; changes in economic, financial, political and
regulatory conditions, in the United Kingdom, the United States and
elsewhere, and other factors that contribute to uncertainty and
volatility, natural and man-made disasters, civil unrest, pandemics
(e.g., the coronavirus (COVID-19) pandemic (the “COVID-19
pandemic”)), geopolitical uncertainty, and conditions that may
result from legislative, regulatory, trade and policy changes
associated with the current or subsequent U.S. or U.K.
administration; the ability of Rentokil Initial or Terminix to
successfully recover from a disaster or other business continuity
problem due to a hurricane, flood, earthquake, terrorist attack,
war, pandemic, security breach, cyber-attack, power loss,
telecommunications failure or other natural or man-made event,
including the ability to function remotely during long-term
disruptions such as the COVID-19 pandemic; the impact of public
health crises, such as pandemics (including the COVID-19 pandemic)
and epidemics and any related company or governmental policies and
actions to protect the health and safety of individuals or
governmental policies or actions to maintain the functioning of
national or global economies and markets, including any quarantine,
“shelter in place,” “stay at home,” workforce reduction, social
distancing, shut down or similar actions and policies; actions by
third parties, including government agencies; the risk that
disruptions from the proposed transaction will harm Rentokil
Initial’s or Terminix’s business, including current plans and
operations; certain restrictions during the pendency of the
acquisition that may impact Rentokil Initial’s or Terminix’s
ability to pursue certain business opportunities or strategic
transactions; Rentokil Initial’s or Terminix’s ability to meet
expectations regarding the accounting and tax treatments of the
proposed transaction; the risks and uncertainties discussed in the
“Risks and Uncertainties” section in Rentokil Initial’s reports
available on the National Storage Mechanism at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on its
website at https://www.rentokil-initial.com; and the risks and
uncertainties discussed in the “Risk Factors” and “Information
Regarding Forward-Looking Statements” sections in Terminix’s
reports filed with the SEC. These risks, as well as other risks
associated with the proposed transaction, will be more fully
discussed in the proxy statement/prospectus and shareholder proxy
circular. While the list of factors presented here is, and the list
of factors to be presented in proxy statement/prospectus and
shareholder proxy circular will be, considered representative, no
such list should be considered to be a complete statement of all
potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of
forward-looking statements. We caution you not to place undue
reliance on any of these forward-looking statements as they are not
guarantees of future performance or outcomes and that actual
performance and outcomes, including, without limitation, our actual
results of operations, financial condition and liquidity, and the
development of new markets or market segments in which we operate,
may differ materially from those made in or suggested by the
forward-looking statements contained in this communication. Except
as required by law, neither Rentokil Initial nor Terminix assumes
any obligation to update or revise the information contained
herein, which speaks only as of the date hereof.
Nothing in this announcement should be construed as a profit
estimate or profit forecast. No statement in this announcement,
including statements that the transaction is accretive to earnings
per share, or enhancing to operating margins should be interpreted
to mean that earnings per share or operating margins of Rentokil
Initial or Terminix for the current or future financial years would
necessarily match or exceed the historical published earnings per
share or core operating margins of Rentokil Initial or
Terminix.
Completion of the transaction is subject to the satisfaction of
several conditions as more fully described in this announcement.
Consequently, there can be no certainty that the completion of the
transaction will be forthcoming.
This announcement does not constitute a prospectus or a
prospectus equivalent document for the purposes of Regulation (EU)
2017/1129 as it forms part of domestic law by virtue of the
European Union (Withdrawal) Act 2018 and underlying legislation
(together, the “UK Prospectus Regulation”). It has been prepared
solely for the transaction referred to in this announcement. A
circular and prospectus are expected to be published by Rentokil
Initial in connection with the transaction in due course.
Certain figures contained in this announcement, including
financial information, have been subject to rounding adjustments.
Accordingly, in certain instances, the sum or percentage change of
the numbers contained in this announcement may not conform
precisely with the total figure given. Except as explicitly stated
in this announcement, none of the contents of Rentokil Initial or
Terminix’s websites, nor any website accessible by hyperlinks on
Rentokil Initial’s or Terminix’s websites, is incorporated in or
forms part of, this announcement.
Notes
Unless otherwise stated: financial information relating to
Rentokil Initial has been extracted or derived from the audited
results for the twelve months ended 31 December 2020 (prepared in
accordance with IFRS); and financial information relating to
Terminix has been extracted or derived from the audited results for
the twelve months ended 31 December 2020 (prepared in accordance
with US GAAP).
All Terminix financial information in this announcement is
presented following US GAAP and may be different in the Circular
and Prospectus, which will be prepared under IFRS and Rentokil
Initial’s accounting policies.
Combined pro forma financial information is based on Rentokil
Initial’s IFRS audited results for the twelve months ended 31
December 2020 and Terminix’s US GAAP audited results for the twelve
months ended 31 December 2020 and may be different in the Circular
and Prospectus, which be based on reconciled Terminix financial
information prepared under IFRS and Rentokil Initial’s accounting
policies.
Non-GAAP results, determined in accordance with Terminix’s
internal policies, exclude the impact of the following GAAP items:
share-based compensation expense, fair value adjustment of
inventory acquired, amortisation of purchased intangible assets,
changes in fair value of contingent consideration, restructuring
and related expenses, upfront payments related to licenses and
other strategic agreements, acquired in-process research and
development, impairment of purchased intangible assets, gains and
losses related to strategic equity investments, litigation charges,
gain or loss on the sale of a business or asset, gain or loss
related to purchase options, contingent milestone payments
associated with acquisitions of legal entities accounted for as
asset acquisitions, acquisition-related costs and certain
adjustments to income tax expense. These non-GAAP financial
measures are not intended to be considered in isolation or as a
substitute for, or superior to, the financial measures prepared and
presented in accordance with GAAP and should be reviewed in
conjunction with the relevant GAAP financial measures.
Sources of information and bases of calculation
i.
As at 8 December 2021, there were
121,159,960 Terminix shares outstanding. The International
Securities Identification Number for the Terminix Shares is
US88087E1001.
ii.
Any references to the issued and to be
issued ordinary share capital of Terminix are based on:
a)
the 121,159,960 Terminix Shares referred
to in paragraph (i) above; and
b)
1,203,679 Terminix Shares which may be
issued on or after the date of this announcement to satisfy the
exercise of stock options and restricted and performance stock
awards outstanding under the Terminix Share Plans, estimated based
on the total consideration of US$55.00 per Terminix share and
calculated in accordance with the Treasury Stock Method.
iii.
As at 10 December 2021, there were
1,859,332,965 Rentokil Initial Ordinary Shares in issue, of which
all shares have voting rights attached.
iv.
The value placed by the Transaction on the
entire issued and to be issued ordinary share capital of Terminix
is to be calculated:
a)
based on the 5-day average of the daily
volume weighted average price of a Rentokil Initial Share ending
Friday 10 December 2021, derived from Factset, and the average
Sterling - US Dollar exchange rate over the same period, derived
from Factset ; and
b)
on the basis of the issued and to be
issued share capital of Terminix (as set out in paragraph (ii)
above).
v.
The share capital of the Combined Group
(being 2,502,619,657) has been calculated as the sum of:
a)
1,859,332,965 Rentokil Initial Shares,
being the number of Rentokil Initial Shares in issue as at 10
December 2021; and
b)
643,286,692 New Rentokil Initial Shares
which would be issued pursuant to the terms of the Transaction.
vi.
The percentage of the share capital of the
Combined Group that will be owned by Terminix Shareholders is
calculated by dividing the number of New Rentokil Initial Shares to
be issued pursuant to the terms of the Transaction referred to in
paragraph (v) above by the issued share capital of the Combined
Group (as set out in paragraph (v) above) and multiplying the
resulting sum by 100 to produce a percentage.
vii.
Unless otherwise stated all prices and
closing prices for Terminix Shares and Rentokil Initial Shares are
derived from Bloomberg.
viii.
The volume weighted average price of a
Terminix Share is derived from Bloomberg by reference to the volume
weighted average price over the last 90 days up to 13 December 2021
(being the last Business Day prior to announcement of an offer for
Terminix).
ix.
The transaction value multiples are
derived from:
a)
The value placed by the transaction on the
entire issued and to be issued ordinary share capital of Terminix
(as set out in paragraph (iv) above);
b)
The net debt of Terminix as at 30
September 2021; and
c)
The Consensus estimate for Terminix's 2021
EBITDA.
x.
The 2020 financials for the Combined Group
are based on:
a)
The 2020 Rentokil Initial Annual
Report;
b)
The 2020 Terminix Annual Report; and
c)
The Sterling - US Dollar exchange rate on
10 December 2021, derived from Factset.
xi.
Pest control market data is based on
information from a variety of industry reports, and Internal Data
Forecasts from June 2021.
Daragh Fagan
Company Secretary
Rentokil Initial plc
All alternative performance measures used within this document
for Rentokil Initial are consistent with those used in the 2020
Annual Report and definitions can be found in Note E to the
Financial statements.
1 GBP/USD rate of 1.3273 as per 10 December 2021 used to form
Combined Group financials. Calculated using Terminix financial
results in accordance with US GAAP and Rentokil Initial results in
accordance with IFRS. Subject to amendment by Rentokil Initial when
stated in the Circular and Prospectus and based on Rentokil
Initial's accounting policies.
2 Earnings accretion is not a profit forecast.
3 Earnings accretion is not a profit forecast.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211213006135/en/
Rentokil Initial
Investors / Analysts: Katharine
Rycroft Rentokil Initial plc +44 (0)7811 270734 Media: Malcolm Padley Rentokil Initial plc +44
(0)7788 978199 Richard Mountain FTI Consulting +44 (0)7909 684466
Terminix Investors / Analysts: Jesse Jenkins | Terminix
| +1 901-597-8259 | Jesse.Jenkins@terminix.com Media: James Robinson | Terminix | +1
901-597-7521 | James.Robinson@terminix.com Joele Frank, Wilkinson
Brimmer Katcher | Dan Moore / Andrew Siegel | +1 212-355-4449
Terminix Global (NYSE:TMX)
Historical Stock Chart
From Sep 2024 to Oct 2024
Terminix Global (NYSE:TMX)
Historical Stock Chart
From Oct 2023 to Oct 2024