Completion Of Rentokil Initial Joint Venture With Haniel

30 Jun 2017

Redeploying proceeds into higher growth markets – Pest Control and Hygiene

Rentokil Initial plc (FTSE: RTO, "the Company") and Franz Haniel & Cie. GmbH (“Haniel”) are delighted to announce the completion of their agreement, announced on 16 December 2016, to form a joint venture (“the JV”), which will become a leading provider of Workwear and Hygiene services in Europe.

The JV brings together Rentokil Initial’s Workwear and Hygiene businesses (“the Rentokil Initial businesses”) in 10 countries principally in the Benelux and Central Europe regions with Haniel’s businesses in 16 countries which operate under the CWS-boco brand. In the 12 months to 30 June 2016, the JV had combined revenues of c. EUR1.1bn and APBITA of over EUR130m.

Key points:

  • On 7 June 2017, the European Commission cleared the formation of the joint venture under the EC Merger Regulation unconditionally.
  • As a consequence of completion, the Rentokil Initial businesses (c. 2,500 people) have transferred into CWS-boco, a company owned by Haniel. The Rentokil Initial businesses transfer at a multiple of 15.2x APBITA (12 months to 30 June 2016).
  • In consideration for the transfer, the Company receives:
    • c. EUR520m in cash, subject to completion adjustments;
    • A c. 18% stake in the JV; and
    • An annual dividend of EUR19m for five years, with the first payment in H1 2018.
  • The Company’s pro forma net debt: EBITDA ratio (as at 31 December 2016) is reduced from 2.5x to 2.0x as a consequence of completion, with annual interest costs reduced by c. £7m p.a., providing increased flexibility for acquisitions in Pest Control and Hygiene.
  • Following completion, the percentage of the Company’s revenues from its Growth and Emerging markets is 80%, with Pest Control accounting for 60% and Hygiene accounting for 20%.
  • In addition, under the terms of the agreement, the Company has acquired the EUR45m CWS-boco Hygiene business in Italy, but not in Ireland.

The Company’s stake in the JV ensures its continued exposure to the combined businesses’ profit growth potential, which the Company’s management believes is strengthened by the complementary nature of the businesses’ operations, products and capabilities as well as the anticipated synergies and efficiencies. As previously stated, the Company expects to maintain its stake in the JV for a minimum of three years and has various contractual exit options to optimise value for shareholders further.

Andy Ransom, Chief Executive of Rentokil Initial, commented:

We are delighted that the joint venture has completed on schedule.  The deal aligns with our value-creating capital allocation model perfectly, as not only does it increase our ability to invest in our core growth categories of Pest Control and Hygiene, but it also protects value through an investment in a leading European Workwear and Hygiene business.  It represents a step change in the execution of our strategy with 80% of group revenues now coming from Pest Control and Hygiene services.

Stephan Gemkow, Chief Executive of Haniel, commented:

"This joint venture represents yet another success for us as a family equity company using a buy and build strategy to increase the divisions' growth and profitability. CWS-boco and Initial are combining their strengths to continue their outstanding performance in the attractive market for workwear, cleanroom and hygiene services. At the same time, this enables us to strengthen our diversified portfolio's future viability.

Rentokil Initial will announce its Interim Financial Results for the six months to 30 June 2017 on Thursday 27 July and will provide further information about the transaction at that time.


Notes to editors:

Rentokil Initial

Rentokil Initial is one of the largest business services companies in the world, operating in over 65 countries and employing 35,500 colleagues.  The Company offers route-based services, primarily in Pest Control and Hygiene services through teams of local experts.  For more information, visit  

The Rentokil Initial Workwear and Hygiene businesses in the JV:

  • Belgium, Netherlands, Luxembourg, Germany, Austria, Switzerland, Czech Republic, Slovakia, Poland and Sweden. 

    The JV does not include:

  • Pest Control, Plants, Specialist Hygiene, Premium Scenting, Medical, Dental and other operations in the above countries.
  • All businesses in France, Italy and Ireland.
  • All businesses outside of continental Europe.

    Haniel & Cie. GmbH

    Franz Haniel & Cie. GmbH is a German family equity company which has been headquartered in Duisburg-Ruhrort since it was founded in 1756. It is from there that the holding company, which is wholly owned by the family, manages a diversified portfolio in line with a long-term investment strategy as a value developer. Haniel's portfolio currently includes four business divisions which are independently responsible for their own operating business and which hold a leading market position in their respective sectors: BekaertDeslee, CWS-boco and ELG (wholly owned), TAKKT (majority owned). In addition there is the METRO GROUP financial investment.  For more information, visit


    CWS-boco International GmbH is one of the leading international providers of professional textile services and washroom hygiene solutions. This includes the well-known CWS cotton towel, soap and fragrance dispensers and dust control mats, as well as industrially washable workwear and business wear, customer-specific corporate fashion collections, and protective clothing from boco.

    Further information can be found at:

    The Haniel Workwear and Hygiene businesses in the JV:

  • Belgium, Netherlands, Luxembourg, Germany, Austria, Switzerland, Czech Republic, Slovakia, Poland, Sweden, Bulgaria, Ireland, Croatia, Hungary, Romania and Slovenia. 


Investors / Analysts:

Katharine Rycroft

Rentokil Initial plc

07811 270734


Malcolm Padley

Rentokil Initial plc

07788 978 199


Ben Woodford/Sam Cartwright

Bell Pottinger

0203 772 2588


Dietmar Bochert


+49 203 806-578


Talar Arzuyan-Kadoglou


+49 6103 309-1032

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