It’s not unusual for pest management companies to make the Top 100 list with help from acquisitions, but this year a newcomer earned the number 40 spot by being sold off.
P.E.S.T., an acronym for Providing Exterminating Solutions Today, is the former termite fumigation business of Terminix International. The business unit was divested “to allow Terminix to focus on its profitable core preventative and curative liquid and bait termite markets,” according to a Securities and Exchange Commission report filed by ServiceMaster, the company’s owner, on Dec. 19, 2018.
Architect Equity acquired the business unit in April 2019. The new company, American Fumigation Services doing business as P.E.S.T., generated $17.4 million in revenue in the nine months from April through December.
P.E.S.T. is the fumigation subcontractor for Terminix and performs all of Terminix’s structural fumigation work. “Terminix is our primary customer,” said CEO Paul Drewry, who worked in operations at Terminix for 27 years before joining P.E.S.T., based in Pompano Beach, Fla. Ninety-five percent of the new company’s revenue in 2019 came from termite fumigations and 90 percent of those services were to residential accounts.
Drewry said he expects growth for P.E.S.T. in several areas. In addition to its partnership with Terminix, growth will come from performing fumigation work for other termite control companies and selling fumigation and annual termite renewals directly to consumers.
The company also is expanding to offer full-service pest control, including quarterly service and termite baiting systems. Usually, traditional termite and pest control firms dabble in fumigation or subcontract it out. “We’re sort of the reverse. We have this strong presence in fumigation and then we’ll be adding the more conventional service lines,” said Drewry.
Besides operating in California, Florida and Hawaii where it has 13 offices and 200 employees, P.E.S.T. plans to expand into other states, either through acquisitions or organic growth, and eventually offer pest control service nationwide. “That was very transparent at the time of the sale and Terminix understands that in order for our business to grow and sustain itself we need reoccurring revenue,” Drewry explained.
Safety, which is paramount in fumigation, will remain a major focus of the new company. In 2015, Terminix was involved in two fumigation-related accidents, one in the British Virgin Islands and one in Palm City, Fla., that left people with life-threatening injuries. “After that, Terminix really changed some things up and launched all kinds of additional safety initiatives and so they had everything in good running order at the time of the sale. What we’ve tried to do is take all of the safety and SOPs (standard operating procedures) that Terminix had in place and just add to them to make it even better,” said Drewry.
Being owned by a private equity group has advantages. “Their expertise is strategy” and they bring a fresh, outside perspective that will help P.E.S.T. continue to grow and optimize performance, explained Drewry.
P.E.S.T. is open to exploring opportunities with other pest management companies, such as fumigation referral fees and subcontracting general pest services. “We are a very creative and innovative company and we can partner with other companies out there in many different ways,” Drewry said.
Architect Equity, founded in 2018, is based in Los Angeles. — Anne Nagro