3 Years Of Waiting To Buy A $6.7 Billion Rival
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1Let me tell you about this CEO who is about to spend six point seven billion dollars on a business that is getting rid of bugs.
2And it's about to go very, very wrong.
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3Now the CEO, his name's Andy.
4And Andy runs a British company called Rentokil. Rent-oh-kill.
5Fun fact, the guy who started it in 1925 wanted to call it "Entokil", from the Greek word for insect.
6Somebody already had that name. So he just stuck an R on the front. Rentokil.
7And what do they do? They kill bugs. Rats, roaches, termites.
8You call them, a guy shows up in a van, the bugs go away. That's the whole business.
9And all Andy wants is to dominate America. Because America is the biggest bug-killing market in the world.
10And Andy is not winning it.
11Because the company in his way is the American one. Terminix. Ter-mih-nicks.
12You've probably seen their trucks. Almost three million customers.
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⬇ photo-terminix-truckText on screen: 2.9 MILLION CUSTOMERS + credit: Ildar Sagdejev / Wikimedia Commons, CC BY-SA 4.0
13And here's why you should care. This story has a six point seven billion dollar price tag,
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Text on screen: $6.7 BILLION
14a CEO who waits three years,
15a fight over one single dollar that's worth a hundred and twenty million,
16a twelve million dollar golden parachute,
17and a stock that crashes twenty percent in one day.
18And by the end, I'll show you how the exact same playbook works if you buy one little bug company in your town.
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19Oh, and if we haven't met, my name is Moran Pober. … Just check the links below, you'll see. Okay. Back to Andy.
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Text on screen: Name card: Moran Pober, founder, Acquisitions.com
20So you'd think Andy goes after Terminix, right? Nope. It's actually the other way around.
21It's 2018, and Terminix reaches out to Andy first.
22They meet twice. They sign an NDA.
23Now, an NDA is just a promise on paper. It says: I'll show you my secrets, and you don't tell anybody. Totally normal before you talk about buying a company.
24And then, by June,
25the whole thing dies. They can't agree on the price. Everybody goes home.
26And most people would stop there. But here's the thing. Andy waits.
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27And this is the first lesson, and it's the one nobody believes. Most deals die the first time. In small business, it's the same.
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Text on screen: MY 2 CENTS
28The owner says "not now". The price is wrong. Somebody's not ready.
29The guys who win are the ones who stay in touch. So if an owner tells you no, that's not a no. That's a "call me in a year". Okay, back to Andy.
30So he waits three years.
31And while he's waiting, Terminix does something kind of crazy. It gets rid of everything that isn't killing bugs.
32It had a home warranty business. Gone. It had cleaning brands. Sold.
33So now Terminix is nothing but bugs. Which means it's now exactly the company Andy wants.
34So on October 1st, 2021,
35Andy picks up the phone.
36And he doesn't call the CEO. He calls the chairman.
37The chairman runs the board, and the board is basically the CEO's boss. So Andy goes straight to the boss's boss. Three days later, he calls the CEO.
38So how did he find the deal? Not from a listing. Not from a website. He knew the company, they'd already talked once, and he picked up the phone.
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Text on screen: MY 2 CENTS
39And for a small business, it's honestly the same three ways. One, you call the owner directly.
40Two, you get to know the brokers who sell businesses like this.
41Three, you talk to the accountants and lawyers who know which owners are tired and ready to retire.
42That's where most deals come from. Okay, back to the phone call.
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43Now, Terminix isn't stupid. They hire Lazard. Luh-zard. That's a Wall Street firm you pay to get you the highest price.
44And Lazard quietly goes shopping. They call one big competitor and two private equity firms.
45Private equity is basically a group of rich investors who buy whole companies, mostly with borrowed money.
46And the reason you call them is simple. If you want a better price, you need a second buyer.
47And by the way, how much does Lazard get paid for this? It's right there in the paperwork. Forty-five million dollars.
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Text on screen: Big text over Moran: $45,000,000 in green + FILED tag
🔊 cash register ka-ching
48Five million up front, and the rest only if the deal closes.
49Now, forty-five million sounds insane, but on six point seven billion, that's less than one percent.
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Text on screen: Big text over Moran: LESS THAN 1%
50On small deals, the slice is much bigger. A small business broker selling a company under a million dollars usually charges somewhere around eight to twelve percent of the price.
51On bigger deals, a lot of advisors use a sliding scale: five percent of the first million, four percent of the second, three of the third, and so on down.
52So the bigger the deal, the smaller the percentage, but the bigger the check.
53And if you're someone who knows owners and knows buyers, just think about that. Okay, back to the shopping.
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54Then on October 29th,
55Andy walks into a meeting and he says the number. Fifty-four dollars a share.
56So what's a share? A company like Terminix is cut into millions of tiny pieces. Each piece is a share. If you own one, you own a tiny slice of the company.
57Terminix had about 120 million of them.
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Text on screen: Big text over Moran: 120,000,000 SHARES
58So Andy is offering fifty-four bucks for every single slice.
59And he doesn't want to pay it all in cash. Twenty percent cash. Eighty percent in Rentokil shares.
60So he's basically saying: I'll pay you mostly with pieces of my own company.
61Then Terminix's phone starts ringing. And it's bad news.
62The first private equity firm says, we can't beat that price. The big competitor says, we'd never be able to swallow a company this size.
63And on November 18th, the last private equity firm walks away too.
64So now Terminix has exactly one buyer. Andy.
65And as far as the paperwork shows, Andy has no idea. That's the whole game.
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66So what does Terminix do? They push anyway. They look at their own stock chart and notice something. At one point that year, their share price hit fifty-five dollars.
67So they basically tell Andy: you're offering us less than our own stock was worth this year.
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68And Andy goes up one dollar. Fifty-five. Exactly that high. The whole price fight? One dollar.
69But one dollar times 120 million shares is about 120 million dollars. So yeah. That one dollar matters.
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Text on screen: Big text over Moran: $1 × 120M SHARES = $120 MILLION in green
🔊 cash register ka-ching
70And this is a trick you can use tomorrow. Terminix didn't argue about feelings. They pointed at one number the buyer couldn't argue with.
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Text on screen: MY 2 CENTS
71In a small deal, that number might be what the business down the street sold for, or what a bank says it'll lend.
72Find the number they can't argue with. Okay. Back to the lawyers.
73Then the lawyers fight about the scariest three words in buying companies. Hell or high water.
74See, when two giant companies merge, the government checks the deal, to make sure one company doesn't end up owning the whole market and jacking up prices.
75And sometimes the government says: fine, but first you sell off some pieces.
76Terminix wants Andy to promise he'll do anything the government asks. No matter what. Hell or high water. Andy says no way.
77So they agree on a limit. He'll sell off pieces worth up to 12.8 percent of Terminix's sales. And not one penny more.
78And they agree on breakup fees too. If Terminix walks away for a better offer, it pays Andy two hundred million dollars. If the deal dies in certain ways on Andy's side, he pays a hundred and fifty million.
79So basically, both sides put money on the table to prove they're serious.
80December 14th, 2021.
81The deal is announced.
82Fifty-five dollars a share is 47 percent more than the stock was worth the day before.
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Text on screen: Big text over Moran: +47% in green + FILED tag
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83So if you owned Terminix shares, you woke up and they were worth almost half again as much.
84All in, about six point seven billion dollars.
85And Terminix's CEO? The paperwork estimates that if he lost his job after the deal, he could walk away with about twelve point nine million dollars.
86That's called a golden parachute. Not bad for selling a bug company.
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87And Andy makes a promise. Once the two companies are merged, he'll save at least 150 million dollars a year.
88How? One headquarters instead of two. One computer system. And fewer branches covering the same streets.
89The deal closes in October 2022.
90So Andy won. Right?
91Well. To get those savings, you have to actually merge everything. Two sets of offices. Two sets of routes. Two sets of trucks.
92So the guy who's been spraying your house for years, who knows your dog's name? He might not be the guy anymore.
93And in October 2023,
94Rentokil warns investors that its American business is weaker than expected. And the stock drops.
95Then it warns again. And in September 2024, the shares drop as much as 20 percent in one day.
96And now a guy named Nelson Peltz is in the picture.
97Peltz is what they call an activist investor. He buys a big chunk of a company's stock, and then he pushes the bosses to fix things.
98And his firm gets a seat on Rentokil's board.
99Oh, and fun fact. Nelson Peltz's daughter, Nicola, married Brooklyn Beckham in 2022.
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⬇ photo-brooklyn-nicolaText on screen: MARRIED 2022 + credit: Elyot Boudart / Wikimedia Commons, CC BY-SA 4.0
🔊 record scratch
100That's David Beckham's son. So the guy breathing down Andy's neck is David Beckham's in-law.
101And Andy? By the last report, Rentokil's plan keeps about 220 small local branches.
102Turns out the small guys had it right.
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103Okay. That's the story. Now let me show you what I actually see when I look at this deal. And I'll go slow, because this is the stuff nobody explains.
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104Starting with EBITDA. Sounds scary. It's not.
105EBITDA is basically the profit a business makes from doing its job, before it pays interest on its loans, before taxes, and before some accounting stuff. Think of it as: how much cash does this machine spit out every year?
106Terminix made about 345 million dollars of EBITDA in a year. Andy paid 6.7 billion for the shares. Divide one by the other, and you get more than 19.
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Text on screen: Big text over Moran: $6.7B ÷ $345M = 19x + MY MATH tag
107So Andy paid more than 19 years of profit. That's called the multiple. It just means: how many years of profit am I paying for? And that's before Terminix's own loans, which Andy took over too.
108Is 19 expensive? For a small bug company, insanely expensive. But here's what Andy's counting on.
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109Add his 150 million of savings to the 345, and the business now makes about 495 million. Divide 6.7 billion by that, and it's about thirteen and a half.
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Text on screen: Big text over Moran: $6.7B ÷ $495M = 13.5x + MY MATH tag
110So he didn't really buy a company. He bought a savings plan. If the savings show up, the price was fair. If they don't, he overpaid.
111Second word: debt.
112Rentokil lined up a bank loan of up to 2.7 billion dollars to pay the cash part and pay off Terminix's old loans.
113Every year you pay interest on a loan. That yearly payment is called debt service.
114I don't know the exact rate they got, so this is my guess. If it was 5 percent, that's about 135 million dollars a year, just in interest, before you've saved one dollar.
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Text on screen: Big text over Moran: 5% × $2.7B = $135M A YEAR in red + MY GUESS tag
115So those savings aren't a bonus. They're how you pay the bank.
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116Now here's where it gets fun. Because there are four kinds of people watching this, and each one should learn something different.
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Text on screen: 4 LESSONS
117If you own a small business, or you want to buy one, look at this ladder.
118All real numbers. In 2025, Rentokil bought 36 small bug companies. Together they had 63 million dollars of sales, and Rentokil paid 115 million.
119Less than two dollars for every dollar of sales. Small companies sell cheap. One step up: … Clark Pest Control … 17 times that. And at the top, Andy paid more than 19 times for Terminix.
120So the same dollar of profit is worth a little when you're small and a lot when you're big.
121That's the whole roll-up game. You buy one small pest control company. Then you buy the next one in the next town, and the next. Every one you add, the whole thing gets worth more per dollar of profit.
122And one day, either you're the one buying hundreds of them, or you're the one getting the phone call from someone like Andy.
123And how do people buy that first one? Usually not with all their own money. In the US, a lot of small businesses are bought with an SBA-backed bank loan, often with around ten percent down, and sometimes the seller lets you pay part of the price over a few years. That's called a seller note.
124If you're the person who knows owners, or knows buyers, this is your lesson. Remember Lazard's forty-five million.
125Every deal has someone in the middle who found it, set it up, or pushed the price up. On a small deal, that's a broker or an advisor, and it pays.
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126So in your town, who owns the bug company? Who owns the HVAC company? Who's tired and wants out? If you know that, you're worth a lot to someone like Andy.
127If you're an investor, look at who actually made money here. Terminix shareholders got 47 percent more than the day before, in a few weeks. They won.
128Rentokil's shares were about 627 pence when the deal was agreed, and in 2026 they've been trading around 430 to 450. That's roughly a third lower.
129So the lesson is simple. When a big company buys, the seller usually wins on day one. The buyer only wins if the merge works, and that takes years.
130The risk isn't the price. The risk is the integration.
131So when you invest in a roll-up, don't ask "how many companies did you buy?" Ask "show me one you already merged, and what happened to the customers."
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132And this is exactly how the new AI investors think. Firms like General Catalyst and Thrive Capital, and also we at Acquisitions.com, are putting money into what people call AI roll-ups.
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⬇ card-airollupsText on screen: General Catalyst + Thrive + Acquisitions.com logos (press kit only)
133Instead of a tech startup, they back a team that buys boring service businesses, then runs them on AI. General Catalyst says one of these, Long Lake, has bought 18 businesses.
134Their bet is simple: buy the business at a normal price, then use software to make it run with fewer mistakes and less paperwork.
135And that's where I'd do this deal differently. Look at Terminix's own estimate of the savings. About 108 million was the office side … About 45 million was branches and routes. About 21 million was buying, marketing and the call center.
136Guess which part AI is really good at? The office.
137Answering calls, booking appointments, sending invoices, chasing late payments, planning routes. That's where I'd start, on day one.
138But I'd leave the technicians and the routes alone until the numbers prove it's safe. Because the customer doesn't care about your savings plan. The customer cares who shows up at the door.
139So that's the deal. A bug company, a three-year wait, a one-dollar fight, and a stock that's still trying to get back. If you want to build something like this, start with one small company and do the merge right. And if you want me to break down another deal like this, tell me which one in the comments.
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140And Andy? Still killing bugs.
