Rentokil Secures Leading Position in India

02 Apr 2024

Targeting higher growth cities globally - over £100m revenues acquired since 2020.

Rentokil Initial plc (LON: RTO, NYSE: RTO) (“the Company”), the global leader in Pest Control and Hygiene & Wellbeing services, announces the acquisition of HiCare Services Private Limited (“HiCare”), the second largest pest control company in India.

HiCare provides national coverage through 30 branches and has over 1,000 employees delivering commercial, residential and termite pest control services. Customers include food producers, healthcare facilities, airports and hotels. It has annualised revenues of c. INR 800m / c. US$10m and has been owned by True North, a PE Fund, since 2014.

Rentokil Initial has operated in India for more than 15 years. In 2017, the Company acquired a majority holding of India’s largest pest control company, Pest Control India “PCI”), which has been integrated within its existing operations. Currently, the Company has a 65% shareholding in PCI, which will acquire HiCare.

Multiple future growth drivers in India

  • The country’s largely tropical climate increases the pest burden including rodents, cockroaches, termites and mosquitoes (particularly around the onset of the monsoon season which increases the cases of mosquito-borne diseases such as dengue, chikungunya and malaria).
  • India is the most populous country in the world with one-sixth of the world's population and, by 2030, c.41% of the country’s population (2017: 34%) is expected to reside in urban areas (source: UN).
  • 46 cities in India have a population over 1m. Ten cities have population more than 3m. 184 towns and cities have a population over 250,000 people (source: Office of the Registrar General & Census Commissioner, India).
  • The “middle class” in India is expected to grow from 432m people in 2020-21 to 1.02 billion in 2047 (source: The Rise of India’s Middle Class, People Research on India’s Consumer Economy).
  • India is the world’s fifth largest economy. 6.5% annualised GDP growth is forecast over the next five years versus 5.7% over the past 10 years (source: HSBC Global Research).

Growth Cities of the Future M&A strategy exceeds £100m revenues acquired

This latest bolt-on acquisition builds the Company’s leading position across India and is in line with the Company’s global Cities of the Future acquisition strategy. Established in 2020, the strategy targets M&A activity in those cities which the Company expects to see higher urban economic growth and increased demand for pest control services.

Rentokil Initial’s Cities of the Future M&A strategy has so far delivered:

  • 46 acquisitions, completed since 2020, in cities including Sao Paolo, Manila, Delhi, Hyderabad, Mecca, Abu Dhabi, Fuzhou, Foshan, Xiamen and Santiago.
  • Acquired annualised revenues of over £100m in Cities of the Future since 2020.
  • Created the largest pest control company in India.
  • Added material scale in Latin America (Brazil, Colombia and Chile).
  • More than doubled the Company’s scale in the Philippines, Kingdom of Saudi Arabia and the United Arab Emirates, and we have entered Pakistan.

According to PWC’s World in 2050 report, emerging markets could grow around twice as fast as advanced economies on average, and, as a result, six of the seven largest economies in the world are projected to be emerging economies in 2050 led by China and India.

Andy Ransom, CEO of Rentokil Initial plc, commented:

“India’s increasing urban population, growing middle classes and largely tropical climate makes it one of our key targets for future growth. We’re building an exciting platform for long-term success in India where we can introduce our innovations, service standards and new technologies to support our customers. With over 6,000 small pest control companies in India, the roll-up M&A opportunity remains significant.”

Ends.

Enquiries:

Investors / Analysts: Peter Russell, Rentokil Initial plc +44 (0)7795 166506

Media: Malcolm Padley, Rentokil Initial plc +44 (0)7788 978199

Rentokil Initial Facts

  • The world’s largest Pest Control and Hygiene & Wellbeing services company.
  • Operating in 90 countries.
  • Employing 62,900 colleagues.
  • Group Revenues of £5.4bn in 2023, up by 45.8% year on year.
  • Pest Control Revenues of £4.3bn in 2023, up by 60.6% year on year.

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