REG - Rentokil Initial PLC - Acquisition of Terminix Completion

Rentokil InitialAnnouncement

12/10/2022 14:00

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RNS Number : 6824C  Rentokil Initial PLC  12 October 2022

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12 October 2022

RENTOKIL INITIAL PLC

Acquisition of Terminix Completion

Rentokil Initial plc ("Rentokil Initial" or the "Company") today completed the
acquisition of Terminix Global Holdings, Inc. ("Terminix") (the
"Transaction"). Completion of the Transaction marks the combination of two
leading pest control businesses with a long cultural heritage, outstanding
talent and strong focus on people, customers, delivering products and services
responsibly, and benefiting society and the environment by acting in a
responsible manner.

As a result of completion of the Transaction, the Company is now the leading
global pest control company, with approximately 4.9 million customers and
57,700 employees globally.

Andy Ransom, CEO of Rentokil Initial, commented:

"I am delighted to confirm completion of the Terminix transaction and would
like to extend a warm welcome to our new colleagues, customers and
shareholders joining the Rentokil Initial family. This marks an important
milestone in Rentokil Initial's history with the combination adding valuable
scale, capabilities and talent as well as the wonderful Terminix brand.
Following an intense period of successful preparatory work to position the
businesses for effective integration, we are now focused on delivering the
deal's significant benefits. Rentokil Initial is well positioned for long-term
sustainable and profitable growth as the new global leader in Pest Control and
Hygiene & Wellbeing."

Richard Solomons, Rentokil Initial Chairman, said:

"This combination establishes our position as the leading Pest Control
business in North America, the world's largest Pest Control market. We would
like to thank the Board of Terminix and all shareholders for their engagement
in this process and we look forward to delivering the transaction's clear
strategic and financial benefits. I would also like to welcome all our new
colleagues and thank everyone for their continued hard work and focus on our
customers.

"I'm also delighted to welcome David Frear to the Board, who joins us today.
This is a particularly notable appointment as he has been a Director of
Terminix since January 2021, and brings considerable experience as a US-based
CFO and as a board member of leading North American businesses."

Brett Ponton, CEO of Terminix, said:

"We are very excited to be joining a company of Rentokil Initial's pedigree
and to see the Terminix business we've built over 95 years embark on its next
stage of development. The cultural similarities between the two organisations
are clear - focusing on colleagues with outstanding training and high levels
of engagement, who in turn deliver an exceptional standard of service for our
customers. Our aim is to create a world class organisation in North America
with best of breed technologies, systems and operations, driven forward by the
hugely talented people of both organisations. The Terminix team appreciates
the trust placed in us by Rentokil Initial and is ready to become part of its
growth story."

Financial considerations

The aggregate merger consideration Terminix stockholders are entitled to is
approximately $1.34 billion in cash and 129,141,384 new Rentokil Initial
American Depositary Shares (ADSs), representing 645,706,920 new Rentokil
Initial ordinary shares which have been issued to The Bank of New York Mellon
in its capacity as depositary to the Company (the "Depositary").

Under the terms of the Transaction, each Terminix stockholder entitled to
consideration was able to elect, prior to 5:00 p.m. (Eastern Time) on 6
October 2022, to receive either cash consideration or stock consideration for
each share of Terminix common stock they hold, subject to automatic adjustment
and proration mechanisms.

Holders of 38,693,211 shares of Terminix common stock made an election to
receive the cash consideration, and holders of 82,919,979 shares of Terminix
common stock either (i) made an election to receive the stock consideration or
(ii) did not make a valid election by the election deadline and therefore were
deemed to have made an election to receive the stock consideration.

As a result, Terminix stockholders who elected to receive cash consideration
will receive $34.57 in cash and 0.1447 Rentokil Initial ADSs for each share of
Terminix common stock they hold, and Terminix stockholders who elected to
receive stock consideration will receive 1.4899 Rentokil Initial ADSs for each
share of Terminix common stock they hold.

Admission of the new Rentokil Initial ordinary shares issued to the Depositary
to listing on the premium listing segment of the Official List of the
Financial Conduct Authority (the "FCA") and to the trading on the London Stock
Exchange's main market for listed securities has been approved and will be
effective at 8.00 a.m. (UK Time) on 13 October 2022.

Admission of the Rentokil Initial ADSs to listing and trading on the New York
Stock Exchange under the ticker symbol "RTO" has been approved and will be
effective at 9:30 a.m. (Eastern Time) on 12 October 2022.

As a result of completion of the Transaction, the Company's issued share
capital consists of 2,509,539,885 ordinary shares of one pence each, carrying
one vote each. No shares are held in Treasury. Therefore, the total voting
rights of the Company is 2,509,539,885. The above figure for the total number
of voting rights may be used by shareholders as the denominator for the
calculations by which they will determine if they are required to notify their
interest in, or a change to their interest in, the Company under the FCA's
Disclosure Guidance and Transparency Rules.

The consolidation of Terminix has started with effect from completion of the
Transaction and the first consolidated financial reporting will be
the Company's preliminary results for 2022, including the results of Terminix
operations from 12 October 2022.

Board appointment

Rentokil Initial announces the appointment of David Frear to the Company's
Board of Directors as a Non-Executive Director with immediate effect. David
will also become a member of the Company's Remuneration and Nomination
Committees.

David has been a Non-Executive Director of Terminix since January 2021.
 Previously, David served as CFO of subscription-based, satellite radio
provider Sirius XM from 2003 until 2020. He is also a member of the board of
directors of The NASDAQ Stock Market LLC, NASDAQ PHLX LLC, NASDAQ BX, Inc.,
Nasdaq ISE, LLC, Nasdaq GEMX, LLC and Nasdaq MRX, LLC, subsidiaries of Nasdaq,
Inc., a leading provider of trading, clearing, exchange technology, listing,
information and public company services. He previously served on the boards of
Sirius XM Canada Holdings Inc., Savvis Communications and Pandora Media Inc.

There are no further details to be disclosed relating to David Frear under
Section 9.6.13 of the Listing Rules.

Enquiries

 Company Secretary:     Catherine Stead  Rentokil Initial plc  +44 (0)1294 858000
 Media:                 Malcolm Padley   Rentokil Initial plc  +44 (0)7788 978199
 Investors / Analysts:  Peter Russell    Rentokil Initial plc  +44 (0)7795 166506

 

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Forward-looking statements

This announcement contains forward-looking statements. Forward-looking
statements can sometimes be identified by the use of forward-looking terms
such as "believes," "expects," "may," "will," "shall," "should," "would,"
"could," "potential," "seeks," "aims," "projects," "predicts," "is
optimistic," "intends," "plans," "estimates," "targets," "anticipates,"
"continues" or other comparable terms or negatives of these terms, but not all
forward-looking statements include such identifying words. Forward-looking
statements are based upon current plans, estimates and expectations that are
subject to risks, uncertainties and assumptions. Should one or more of these
risks or uncertainties materialise, or should underlying assumptions prove
incorrect, actual results may vary materially from those indicated or
anticipated by such forward-looking statements. The Company can give no
assurance that such plans, estimates or expectations will be achieved and
therefore, actual results may differ materially from any plans, estimates or
expectations in such forward-looking statements. Important factors that could
cause actual results to differ materially from such plans, estimates or
expectations include, among other things: the risks set out in Part I (Risk
Factors) of the combined shareholder circular and prospectus published by the
Company on 7 September 2022 (the "Combined Document"), the Combined Group (as
defined in the Combined Document) is unable to achieve the synergies and value
creation contemplated by the Transaction; the Company is unable to promptly
and effectively integrate Terminix's businesses; management's time and
attention is diverted on Transaction-related issues; disruption from the
Transaction makes it more difficult to maintain business, contractual and
operational relationships; the Combined Group's credit ratings decline
following completion of the Transaction; legal proceedings are instituted
against the Combined Group; the Combined Group is unable to retain or hire key
personnel; completion of the Transaction has a negative effect on the market
price of the Company's shares or on the Combined Group's operating results;
evolving legal, regulatory and tax regimes; changes in economic, financial,
political and regulatory conditions, in the United Kingdom, the United States
and elsewhere, and other factors that contribute to uncertainty and
volatility, natural and man-made disasters, civil unrest, pandemics (e.g., the
COVID-19 pandemic), the ongoing war in Ukraine and the subsequent institution
and extension of sanctions against various Russian organisations, companies
and individuals, geopolitical uncertainty, and conditions that may result from
legislative, regulatory, trade and policy changes associated with the current
or subsequent US or UK administration; the ability of the Combined Group to
successfully recover from a disaster or other business continuity problem due
to a hurricane, flood, earthquake, terrorist attack, war, conflict, pandemic,
security breach, cyber-attack, power loss, telecommunications failure or other
natural or man-made event, including the ability to function remotely during
long-term disruptions such as the COVID-19 pandemic; the impact of public
health crises, such as pandemics (including the COVID-19 pandemic) and
epidemics and any related company or governmental policies and actions to
protect the health and safety of individuals or governmental policies or
actions to maintain the functioning of national or global economies and
markets, including any quarantine, "shelter in place," "stay at home,"
workforce reduction, social distancing, shut down or similar actions and
policies; actions by third parties, including government agencies; the risk
that disruptions from the Transaction will harm the Combined Group's business,
including current plans and operations; certain restrictions following
completion of the Transaction that may impact the Combined Group's ability to
pursue certain business opportunities or strategic transactions; and the
Combined Group's ability to meet expectations regarding the accounting and tax
treatments of the Transaction. Unlisted factors may present significant
additional obstacles to the realisation of forward-looking statements.

Neither the Combined Group nor any of its associates or directors, officers or
advisers provides any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any forward-looking
statements in this announcement will actually occur. Investors are cautioned
not to place undue reliance on these forward-looking statements. Other than in
accordance with their legal or regulatory obligations (including under the
Listing Rules, the Disclosure Guidance and Transparency Rules and the
Prospectus Regulation Rules of the FCA and the Market Abuse Regulation), the
Company is under no obligation, and expressly disclaims any intention or
obligation to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.

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