So this CEO is about to spend six point seven billion dollars on bugs. And it's about to go very, very wrong.

Now the CEO, his name's Andy. And Andy runs a British company called Rentokil. Rent-oh-kill. Fun fact, the guy who started it in 1925 wanted to call it "Entokil", from the Greek word for insect. Somebody already had that name. So he just stuck an R on the front. Rentokil.

And what do they do? They kill bugs. Rats, roaches, termites. You call them, a guy shows up in a van, the bugs go away. That's the whole business.

And all Andy wants is America. Because America is the biggest bug-killing market in the world. And Andy is not winning it.

Because the company in his way is the American one. Terminix. Ter-mih-nicks. You've probably seen their trucks. Almost three million customers.

And here's why you should care. This story has a six point seven billion dollar price tag, a CEO who waits three years, a fight over one single dollar that's worth a hundred and twenty million, a twelve million dollar golden parachute, and a stock that crashes twenty percent in one day. And by the end, I'll show you how the exact same playbook works if you buy one little bug company in your town.

Oh, and if we haven't met, my name is Moran Pober. I'm the founder of Acquisitions.com, and I built and sold Rollups.com. I was involved in a roll-up that went from zero to 200 million dollars in revenue in under a year. And now I run Acquisitions.com, which has been involved in more than a billion dollars' worth of transactions. Just check the website, you'll see. Okay. Back to Andy.

So you'd think Andy goes after Terminix, right? Nope. It's actually the other way around.

It's 2018, and Terminix reaches out to Andy first. They meet twice. They sign an NDA. Now, 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.

And then, by June, the whole thing dies. They can't agree on the price. Everybody goes home.

And most people would stop there. But here's the thing. Andy waits.

And 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. The owner says "not now". The price is wrong. Somebody's not ready. The 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.

So he waits three years. And while he's waiting, Terminix does something kind of crazy. It gets rid of everything that isn't killing bugs. It had a home warranty business. Gone. It had cleaning brands. Sold. So now Terminix is nothing but bugs. Which means it's now exactly the company Andy wants.

So on October 1st, 2021, Andy picks up the phone. And he doesn't call the CEO. He calls the chairman. The 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.

So 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. And for a small business, it's honestly the same three ways. One, you call the owner directly. Two, you get to know the brokers who sell businesses like this. Three, you talk to the accountants and lawyers who know which owners are tired and ready to retire. That's where most deals come from. Okay, back to the phone call.

Now, Terminix isn't stupid. They hire Lazard. Luh-zard. That's a Wall Street firm you pay to get you the highest price. And Lazard quietly goes shopping. They call one big competitor and two private equity firms. Private equity is basically a group of rich investors who buy whole companies, mostly with borrowed money. And the reason you call them is simple. If you want a better price, you need a second buyer.

And by the way, how much does Lazard get paid for this? It's right there in the paperwork. Forty-five million dollars. Five million up front, and the rest only if the deal closes. Now, forty-five million sounds insane, but on six point seven billion, that's less than one percent. On 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. On 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. So the bigger the deal, the smaller the percentage, but the bigger the check. And if you're someone who knows owners and knows buyers, just think about that. And check the rules where you live before you take a fee for connecting a deal. Okay, back to the shopping.

Then on October 29th, Andy walks into a meeting and he says the number. Fifty-four dollars a share.

So 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. Terminix had about 120 million of them. So Andy is offering fifty-four bucks for every single slice.

And he doesn't want to pay it all in cash. Twenty percent cash. Eighty percent in Rentokil shares. So he's basically saying: I'll pay you mostly with pieces of my own company.

Then Terminix's phone starts ringing. And it's bad news. The 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. And on November 18th, the last private equity firm walks away too.

So now Terminix has exactly one buyer. Andy. And as far as the paperwork shows, Andy has no idea. That's the whole game.

So 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. So they basically tell Andy: you're offering us less than our own stock was worth this year.

And Andy goes up one dollar. Fifty-five. Exactly that high. The whole price fight? One dollar. But one dollar times 120 million shares is about 120 million dollars. So yeah. That one dollar matters.

And 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. In a small deal, that number might be what the business down the street sold for, or what a bank says it'll lend. Find the number they can't argue with. Okay. Back to the lawyers.

Then the lawyers fight about the scariest three words in buying companies. Hell or high water. See, 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. And sometimes the government says: fine, but first you sell off some pieces. Terminix wants Andy to promise he'll do anything the government asks. No matter what. Hell or high water. Andy says no way. So 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.

And 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. So basically, both sides put money on the table to prove they're serious.

December 14th, 2021. The deal is announced. Fifty-five dollars a share is 47 percent more than the stock was worth the day before. So if you owned Terminix shares, you woke up and they were worth almost half again as much. All in, about six point seven billion dollars.

And 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. That's called a golden parachute. Not bad for selling a bug company.

And Andy makes a promise. Once the two companies are merged, he'll save at least 150 million dollars a year. How? One headquarters instead of two. One computer system. And fewer branches covering the same streets.

The deal closes in October 2022. So Andy won. Right?

Well. To get those savings, you have to actually merge everything. Two sets of offices. Two sets of routes. Two sets of trucks. So the guy who's been spraying your house for years, who knows your dog's name? He might not be the guy anymore.

And in October 2023, Rentokil warns investors that its American business is weaker than expected. And the stock drops. Then it warns again. And in September 2024, the shares drop as much as 20 percent in one day.

And now a guy named Nelson Peltz is in the picture. Peltz 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. And his firm gets a seat on Rentokil's board.

Oh, and fun fact. Nelson Peltz's daughter, Nicola, married Brooklyn Beckham in 2022. That's David Beckham's son. So the guy breathing down Andy's neck is David Beckham's in-law.

And Andy? By the last report, Rentokil's plan keeps about 220 small local branches. Turns out the small guys had it right.

Okay. 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.

First word: EBITDA. Sounds scary. It's not. EBITDA 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?

Terminix 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. So 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.

Is 19 expensive? For a small bug company, insanely expensive. But here's what Andy's counting on. Add 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. So 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.

Second word: debt. Rentokil lined up a bank loan of up to 2.7 billion dollars to pay the cash part and pay off Terminix's old loans. Every year you pay interest on a loan. That yearly payment is called debt service. I 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. So those savings aren't a bonus. They're how you pay the bank.

Now here's where it gets fun. Because there are four kinds of people watching this, and each one should learn something different.

If you own a small business, or you want to buy one, look at this ladder. All real numbers. In 2025, Rentokil bought 36 small bug companies. Together they had 63 million dollars of sales, and Rentokil paid 115 million. Less than two dollars for every dollar of sales. Small companies sell cheap. One step up: in 2019, Rollins, another giant, bought Clark Pest Control, which made about 24 million of EBITDA a year. They paid 17 times that. And at the top, Andy paid more than 19 times for Terminix.

So the same dollar of profit is worth a little when you're small and a lot when you're big. That'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. And one day, either you're the one buying hundreds of them, or you're the one getting the phone call from someone like Andy.

And 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.

If you're the person who knows owners, or knows buyers, this is your lesson. Remember Lazard's forty-five million. Every 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. So 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.

If 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. Rentokil'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.

So 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. The risk isn't the price. The risk is the integration. So 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."

And this is exactly how the new AI investors think. Firms like General Catalyst and Thrive Capital are putting money into what people call AI roll-ups. Instead 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. Their bet is simple: buy the business at a normal price, then use software to make it run with fewer mistakes and less paperwork.

And 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. Billing, admin, the people doing paperwork. About 45 million was branches and routes. About 21 million was buying, marketing and the call center. Guess which part AI is really good at? The office. Answering calls, booking appointments, sending invoices, chasing late payments, planning routes. That's where I'd start, on day one.

But 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.

So 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.

And Andy? Still killing bugs.