In thinking about the Top 100 issues we’ve produced throughout the years (this year is the 17th list), it feels like I’ve written a similar View Point column in both the recent and not-so-recent past.
For a while now, mergers and acquisitions have continued to dominate the industry’s headlines and conversations. Why? One reason: Your peers are making big bucks as they sell their companies. Even those who weren’t thinking of selling have been wooed by historically high multiples. Industry consolidation hasn’t been as robust since Waste Management went on a buying spree in the mid-1980s.
This year’s list reflects these big changes. There are nine companies off this year’s list and we already know of half a dozen that will be off next year’s. And at press time, we were only through one-third of the year!
This 17th annual PCT Top 100 List marks the first appearance of Sweden-based Anticimex (#19), a notable addition since it’s the first international firm since Rentokil in 2006 to make a splash in the U.S. pest control marketplace. But the world’s fourth-largest pest management firm isn’t the only one interested in our market. Investors have taken note of the pest management industry as well.
I’ve written in this space before about how this list is carefully studied outside of our industry’s “four walls.” More than a few times a year PCT is contacted by a New York (or Chicago or San Francisco) financial analyst looking to learn more about the industry and/or the PCT Top 100 list. Here’s an actual (edited) email I received earlier this year:
“My name is…and I’m an equity analyst at a mutual fund firm in Los Angeles. I’m doing some research on the pest control industry and signed up to subscribe to your magazine yesterday. The online issues are very helpful, as are the historical lists of the Top 100 companies. Do you happen to have online versions of the Top 100 issue going back further than 2015? Thank you! Your magazine has been very helpful in my analysis.”
Dan Gordon, a consultant with PCO M&A Specialists, agrees. In the article “Shattered” on page 24, Gordon says, “Private equity companies have learned how valuable pest control companies are — they’re real companies making real money — and they will continue to have an interest in acquiring these businesses.”
How do these acquisitions affect the list? Not surprisingly, the big get bigger. But also, slowly but surely, new companies appear. There are nine new companies on this year’s list (plus three companies that are making a return after being absent a couple of years or more).
It’s always said that industry consolidation breeds new companies. (Company A buys company B, company B employee says, “I don’t want to work for company A, I can do this myself.” Company B employee starts company C.) I agree with NPMA’s Dominique Stumpf, who is quoted in this issue, saying, “It might feel as though consolidation is gutting the middle, but other companies will move up to fill that gap. Ten years from now, we’ll be seeing many of the companies being formed today take their place among the Top 100.” We can’t wait to see who those new companies are in the future!
Speaking of new companies, yes, this list represents the 100 largest companies by revenue. Their achievements are big, but of course they aren’t the only ones that are doing great things in the pest management industry. Throughout the year, we profile many up-and-coming companies, and we do the same in this issue (we highlight three “new to the list” companies on the following pages). We’ve included a variety of articles in our Top 100 coverage, as well as all of the other content in this issue (Technology Trends Supplement, anyone?), that applies to all of our readers. And we’d love to hear from you about your innovative sales techniques, new service offerings or newsworthy employees. Please drop me a line at firstname.lastname@example.org.
The author is editor of PCT magazine.
P.S. – I know the word “literally” is literally overused but LITERALLY as I was writing this column, we received word that another company on this year’s list was purchased by a top five company. Stay tuned for additional coverage!