REG - Rentokil Initial PLC - Further re Terminix Acqn S&P reaffirms BBB rating

Rentokil InitialAnnouncement

16/12/2021 07:00

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RNS Number : 8118V  Rentokil Initial PLC  16 December 2021

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ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT
LAWS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT IS NOT A PROSPECTUS AND THIS ANNOUNCEMENT DOES NOT
CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, ANY OFFER,
INVITATION OR RECOMMENDATION TO PURCHASE, SELL OR SUBSCRIBE FOR ANY SECURITIES
IN ANY JURISDICTION AND NEITHER THE ISSUE OF THE INFORMATION NOR ANYTHING
CONTAINED HEREIN SHALL FORM THE BASIS OF OR BE RELIED UPON IN CONNECTION WITH,
OR ACT AS AN INDUCEMENT TO ENTER INTO, ANY INVESTMENT ACTIVITY.  THIS
ANNOUNCEMENT IS NOT A CIRCULAR OR EQUIVALENT DOCUMENT AND INVESTORS AND
PROSPECTIVE INVESTORS SHOULD NOT MAKE ANY INVESTMENT DECISION ON THE BASIS OF
ITS CONTENTS. A CIRCULAR AND PROSPECTUS IN RELATION TO THE TRANSACTION
DESCRIBED IN THIS ANNOUNCEMENT WILL EACH BE PUBLISHED IN DUE COURSE.

16 December 2021

 

RENTOKIL INITIAL PLC (RTO)

 

S&P reaffirms long-term corporate credit rating at 'BBB', with outlook
stable

 

Rentokil Initial plc announces that S&P Global Ratings (S&P) has
reaffirmed its corporate credit rating at 'BBB', with outlook stable. This
follows the announcement on Tuesday 14 December of Rentokil Initial's US$6.7
billion acquisition of Terminix Global Holdings, Inc. On closing S&P is
expected to move the Business Risk Profile from Satisfactory to Strong to
reflect the Group's increased scale and no.1 position in the US.

Commenting, Andy Ransom, CEO of Rentokil Initial, said: "We are pleased with
the reaffirmation of our rating by S&P and their view that the transaction
will have a transformational impact on Rentokil Initial, significantly
improving our scale and density, and enhancing our position in the US, the
largest pest control market in the world.  It reinforces our confidence that
the combination of Rentokil Initial and Terminix will deliver substantial
value creation for shareholders. The Transaction is expected to be mid-teens
percent accretive to Rentokil Initial's earnings per share in the first full
year post completion and, including at least $150m of cost synergies, to
exceed the Company's cost of capital by the third full year following
completion."

 Enquiries:

Investors / Analysts:  Katharine  Rycroft   Rentokil Initial plc  07811 270734
 Media:                 Malcolm Padley       Rentokil Initial plc  07788 978199

 

 

 

 

 

 For more information, visit www.rentokil-initial.com
(http://www.rentokil-initial.com/)

 

 

Important notice

 

Barclays, who is authorised by the Prudential Regulation Authority (the "PRA")
and regulated in the United Kingdom by the Financial Conduct Authority (the
"FCA") and the PRA, together with Goldman Sachs, who is authorised by the PRA
and regulated by the FCA and the PRA in the United Kingdom, are each acting
exclusively for Rentokil Initial and no one else in connection with the
Transaction and the matters referred to in this document and will not regard
any other person as a client in relation to the matters set out in this
document and will not be responsible to anyone other than Rentokil Initial for
providing the protections afforded to their respective clients, nor for
providing advice in relation to the Transaction or any other matter referred
to in this document. Neither Barclays nor Goldman Sachs, nor any of their
respective subsidiaries, holding companies, branches or affiliates owes or
accepts any duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise) to any
person who is not a client in connection with the Transaction or any statement
contained herein or otherwise. Apart from the responsibilities and
liabilities, if any, which may be imposed on each of Barclays and Goldman
Sachs by the Financial Services and Markets Act 2000 ("FSMA"), or the
regulatory regime established thereunder, or under the regulatory regime of
any jurisdiction where exclusion of liability under the relevant regulatory
regime would be illegal, void or unenforceable, neither Barclays nor Goldman
Sachs nor any of their respective affiliates accepts any responsibility or
liability whatsoever for the contents of this announcement, and no
representation, express or implied, is made by it, or purported to be made on
its behalf, in relation to the contents of this announcement, including its
accuracy, completeness or verification of any other statement made or
purported to be made by it, or on its behalf, in connection with Rentokil
Initial or the matters described in this announcement. To the fullest extent
permitted by applicable law, each of Barclays and Goldman Sachs and each of
their respective affiliates accordingly disclaim all and any responsibility or
liability whether arising in tort, contract or otherwise (save as referred to
above) which they might otherwise have in respect of this announcement or any
statement contained therein.

 

Additional Information About The Proposed Transaction And Where To Find It

 

In connection with the proposed transaction between Rentokil Initial plc
("Rentokil Initial") and Terminix Global Holdings, Inc. ("Terminix"), Rentokil
Initial will file with the U.S. Securities and Exchange Commission (the "SEC")
a registration statement on Form F-4, which will include a proxy statement of
Terminix that also constitutes a prospectus of Rentokil Initial. Each of
Rentokil Initial and Terminix will also file other relevant documents in
connection with the proposed transaction. The definitive proxy
statement/prospectus will be sent to the shareholders of Terminix. Rentokil
Initial will also file a shareholder proxy circular in connection with the
proposed transaction with applicable securities regulators in the United
Kingdom and the shareholder proxy circular will be sent to Rentokil Initial's
shareholders. This communication is not a substitute for any registration
statement, proxy statement/prospectus or other documents Rentokil Initial
and/or Terminix may file with the SEC in connection with the proposed
transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS, INVESTORS,
STOCKHOLDERS AND SHAREHOLDERS OF TERMINIX AND RENTOKIL ARE URGED TO READ
CAREFULLY AND IN THEIR ENTIRETY THE PROXY STATEMENT/PROSPECTUS AND SHAREHOLDER
PROXY CIRCULAR, AS APPLICABLE, AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED
OR WILL BE FILED WITH THE SEC OR APPLICABLE SECURITIES REGULATORS IN THE
UNITED KINGDOM, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS,
IN CONNECTION WITH THE PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE, AS
THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT TERMINIX, RENTOKIL
INITIAL, THE PROPOSED TRANSACTION AND RELATED MATTERS. The registration
statement and proxy statement/prospectus and other documents filed by Rentokil
Initial and Terminix with the SEC, when filed, will be available free of
charge at the SEC's website at www.sec.gov. In addition, investors and
shareholders will be able to obtain free copies of the proxy
statement/prospectus and other documents filed with the SEC by Terminix online
at investors.terminix.com, upon written request delivered to Terminix at 150
Peabody Pl., Memphis, TN 38103, USA, Attention: Corporate Secretary, or by
calling Terminix's Corporate Secretary's Office by telephone at +1
901-597-1400 or by email at deidre.richardson@terminix.com, and will be able
to obtain free copies of the registration statement, proxy
statement/prospectus, shareholder proxy circular and other documents which
will be filed with the SEC and applicable securities regulators in the United
Kingdom by Rentokil Initial online at https://www.rentokil-initial.com, upon
written request delivered to Rentokil Initial at Compass House, Manor Royal,
Crawley, West Sussex, RH10 9PY, England, Attention: Katharine Rycroft, or by
calling Rentokil by telephone at +44 (0)7811 270734 or by email at
katharine.rycroft@rentokil-initial.com.

 

This communication is for informational purposes only and is not intended to,
and shall not, constitute an offer to sell or buy or the solicitation of an
offer to sell or buy any securities, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to appropriate registration or qualification under the
securities laws of any such jurisdiction.  No offering of securities shall be
made except by means of a prospectus meeting the requirements of Section 10 of
the U.S. Securities Act of 1933, as amended.

 

 

 

Participants in the Solicitation of Proxies

 

This communication is not a solicitation of proxies in connection with the
proposed transaction.  However, under SEC rules, Terminix, Rentokil Initial,
and certain of their respective directors, executive officers and other
members of the management and employees may be deemed to be participants in
the solicitation of proxies in connection with the proposed transaction.
Information about Terminix's directors and executive officers may be found on
its website
at corporate.terminix.com/responsibility/corporate-governance and in its
2020 Annual Report on Form 10-K filed with the SEC on February 26, 2021,
available at investors.terminix.com and www.sec.gov.  Information about
Rentokil Initial's directors and executive officers may be found on its
website at https://www.rentokil-initial.com and in its 2020 Annual Report
filed with applicable securities regulators in the United Kingdom on March 31,
2021, available on its website at https://www.rentokil-initial.com. These
documents can be obtained free of charge from the sources indicated above.
Additional information regarding the interests of such potential participants
in the solicitation of proxies in connection with the proposed transaction
will be included in the proxy statement/prospectus and shareholder proxy
circular and other relevant materials filed with the SEC and applicable
securities regulators in the United Kingdom when they become available.

 

Information Regarding Forward-Looking Statements

 

This communication contains forward-looking statements as that term is defined
in Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended by the Private Securities
Litigation Reform Act of 1995. 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 materialize,
or should underlying assumptions prove incorrect, actual results may vary
materially from those indicated or anticipated by such forward-looking
statements.  We 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: a condition to
the closing of the proposed transaction may not be satisfied; the occurrence
of any event that can give rise to termination of the proposed transaction; a
regulatory approval that may be required for the proposed transaction is
delayed, is not obtained or is obtained subject to conditions that are not
anticipated; Rentokil Initial is unable to achieve the synergies and value
creation contemplated by the proposed transaction; Rentokil Initial is unable
to promptly and effectively integrate Terminix's businesses; management's time
and attention is diverted on transaction related issues; disruption from the
proposed transaction makes it more difficult to maintain business, contractual
and operational relationships; the credit ratings of Rentokil Initial declines
following the proposed transaction; legal proceedings are instituted against
Terminix or Rentokil Initial; Terminix or Rentokil Initial is unable to retain
or hire key personnel; the announcement or the consummation of the proposed
acquisition has a negative effect on the market price of the capital stock of
Terminix or Rentokil Initial or on Terminix's or Rentokil Initial'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 coronavirus (COVID-19) pandemic (the "COVID-19 pandemic")), geopolitical
uncertainty, and conditions that may result from legislative, regulatory,
trade and policy changes associated with the current or subsequent U.S. or
U.K. administration; the ability of Rentokil Initial or Terminix to
successfully recover from a disaster or other business continuity problem due
to a hurricane, flood, earthquake, terrorist attack, war, 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
proposed transaction will harm Rentokil Initial's or Terminix's business,
including current plans and operations; certain restrictions during the
pendency of the acquisition that may impact Rentokil Initial's or Terminix's
ability to pursue certain business opportunities or strategic transactions;
Rentokil Initial's or Terminix's ability to meet expectations regarding the
accounting and tax treatments of the proposed transaction; the risks and
uncertainties discussed in the "Risks and Uncertainties" section in Rentokil
Initial's reports available on the National Storage Mechanism at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) and on its website at
https://www.rentokil-initial.com; and the risks and uncertainties discussed in
the "Risk Factors" and "Information Regarding Forward-Looking Statements"
sections in Terminix's reports filed with the SEC. These risks, as well as
other risks associated with the proposed transaction, will be more fully
discussed in the proxy statement/prospectus and shareholder proxy circular.
While the list of factors presented here is, and the list of factors to be
presented in proxy statement/prospectus and shareholder proxy circular will
be, considered representative, no such list should be considered to be a
complete statement of all potential risks and uncertainties. Unlisted factors
may present significant additional obstacles to the realization of
forward-looking statements. We caution you not to place undue reliance on any
of these forward-looking statements as they are not guarantees of future
performance or outcomes and that actual performance and outcomes, including,
without limitation, our actual results of operations, financial condition and
liquidity, and the development of new markets or market segments in which we
operate, may differ materially from those made in or suggested by the
forward-looking statements contained in this communication.  Except as
required by law, neither Rentokil Initial nor Terminix assumes any obligation
to update or revise the information contained herein, which speaks only as of
the date hereof.

 

Nothing in this announcement should be construed as a profit estimate or
profit forecast. No statement in this announcement, including statements that
the transaction is accretive to earnings per share, or enhancing to operating
margins should be interpreted to mean that earnings per share or operating
margins of Rentokil Initial or Terminix for the current or future financial
years would necessarily match or exceed the historical published earnings per
share or core operating margins of Rentokil Initial or Terminix.

 

 

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