Rentokil Initial PLC Acquisition, CDC Contract Win and Trading Update (4823D)
07 July 2016 - 4:00PM
UK Regulatory
TIDMRTO
RNS Number : 4823D
Rentokil Initial PLC
07 July 2016
7 July 2016
Acquisition, CDC Contract Win and Trading Update
Rentokil acquires Residex
Rentokil Initial plc (FTSE: RTO, "the Company") announces its
continued expansion in North America with the acquisition of pest
control and turf products distribution business Residex LLC
("Residex") for US$30m.
Residex is the largest independent products distribution company
in the US, with annualised revenues for the 12 months prior to
acquisition of $113m. The acquisition increases the scale of the
Company's existing pest and turf products business, which more than
doubles in size. It creates the second largest business of this
type in the US market, delivering national coverage and a greater
density footprint.
Andy Ransom, Chief Executive of Rentokil Initial plc, said: "I'm
delighted to welcome the Residex team to Rentokil Initial. North
America is a strategic growth market for Rentokil with great
potential for continued profitable growth and our acquisition
pipeline remains strong. The addition of Residex means that our
business in North America is set to deliver annualised revenues of
around $1 billion by the end of the year - some two years ahead of
our expectations."
In the first half of 2016 the Company completed a series of 20
highly-targeted city-based acquisitions, predominantly in Pest
Control in North America, Asia, Pacific and Europe. Total
annualised revenues in the year prior to acquisition for these
businesses acquired, including Residex, were c. GBP100m.
Rentokil wins two-year contract with the US government to combat
Zika virus
Rentokil North America has been awarded a contract by the U.S.
Centers for Disease Control and Prevention ("CDC") to help control
the species of mosquito that could potentially carry the Zika virus
across the USA and its protectorates. The requirement of the
programme is to provide pest control services until June 2018,
subject to government review. As required, Rentokil will deploy its
network of more than 4,000 pest control experts alongside its
global technical resource to target affected or high-risk areas.
Additionally, a key component of the contract includes support
services that entail community outreach, surveillance and
inspection, and support for the distribution of materials and
educational information.
Andy Ransom, Chief Executive of Rentokil Initial plc, said: "I'm
proud that Rentokil has been selected to support the work of the
CDC throughout the USA. Across the world we combat the dangers to
public health from mosquitoes such as Dengue fever in Asia, to
Malaria and West Nile virus in Africa and the Americas. Our depth
of expertise and experience in global mosquito control is simply
unmatched."
Trading update
Following its First Quarter trading announcement on 20 April the
Company has continued to perform well and our expectations for 2016
at constant exchange rates remain unchanged.
In respect of the outcome of the EU Referendum and the UK's
decision to leave the EU, we advise that approximately 90% of the
Company's revenues are derived from outside the UK and there is
minimal cross-border trading across its global businesses. Sterling
has weakened significantly since the announcement and, if recent
rates were to prevail for the remainder of the year, the estimated
favourable impact of currency movements on our profit for 2016
would be in the range of GBP25m to GBP30m. This would be an
increase of GBP10m to GBP15m on the guidance previously given at
the time of our Preliminary results.
We also note that on 29 June 2016, Standard & Poor's removed
its negative outlook from the Company's BBB debt rating, reflecting
continued good progress in the execution of the Steritech
integration.
The Company will provide more details on its H1 performance and
its prospects for the remainder of 2016 at its Interim Results on
28 July 2016.
Notes to Editors
About Rentokil Initial plc
Rentokil Initial is one of the largest business services
companies in the world, operating in over 60 countries. The Company
offers route-based services including Pest Control, Hygiene and
Workwear through teams of local experts.
About Products Distribution
The Company's existing Target Specialty Products business is a
leading US national wholesale distributor of specialty agricultural
chemicals, application equipment, products, supplies, services and
education. It provides products and services to both private and
public sector industries including structural pest control,
landscape construction and maintenance, golf course maintenance and
turfgrass maintenance, production nursery, industrial vegetation
management, aquatic, forestry and vector control.
Residex LLC is a Michigan headquartered pest products and turf
management products distribution company. It was founded in 1946
and in 2010 it merged with Turfgrass, adding turf products to
Residex's predominantly pest products business. Today the company's
sales are approximately 50 per cent pest products and 50 per cent
turf products. It sells its products throughout the US and Canada
with a particular focus on the Midwest, South East and North East
US.
Enquiries:
Investor / Analyst enquiries: Katharine Rycroft, Investor
Relations, Rentokil Initial plc:
07811 270 734
Media enquiries: Malcolm Padley, Corporate Communications,
Rentokil Initial plc:
07788 978 199 Ben Woodford / Sam
Cartwright, Bell Pottinger: 0203 772 2566
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQUGUBUMUPQPGQ
(END) Dow Jones Newswires
July 07, 2016 02:00 ET (06:00 GMT)
Rentokil Initial (LSE:RTO)
Historical Stock Chart
From Apr 2024 to May 2024
Rentokil Initial (LSE:RTO)
Historical Stock Chart
From May 2023 to May 2024