REG - Rentokil Initial PLC - Sale of France Workwear

Rentokil InitialAnnouncement

28/05/2025 07:00

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RNS Number : 3135K  Rentokil Initial PLC  28 May 2025

 

28(th) May 2025

RENTOKIL INITIAL PLC

 

Sale of France Workwear

 

Rentokil Initial plc (the "Group") is pleased to announce that it has entered
into an agreement for the intended sale of its Workwear business in France
with H.I.G. Capital (the "Proposed Transaction"). France Workwear comprises
Rentokil Initial's workwear, flat linen and clean room business in France. As
is common in France, a binding put option has been signed by H.I.G. Capital,
committing it to complete the Proposed Transaction once mandatory information
and consultation procedures with the French employee representative bodies and
customary regulatory approvals have been satisfied.

 

The Proposed Transaction values France Workwear at a gross enterprise value of
approximately €410m (c.$465m) on a cash-free debt-free basis including an
earn-out mechanism with a maximum value of €30m (c.$34m) linked to the
performance of the business in 2026. Total net cash proceeds are expected to
be approximately €370m (c.$420m), subject to customary closing adjustments
and the final earn-out outcome. Completion is expected to occur in Q4
2025.

 

The Proposed Transaction positions Rentokil Initial more clearly as a
streamlined Pest and Hygiene & Wellbeing business, enabling the Group to
effectively concentrate resources to better capitalise on the large,
attractive long-term growth markets within these core areas. The sale of
France Workwear results in a business with revenue comprising c.80% Pest and
c.20% Hygiene & Wellbeing.

 

In addition, the Proposed Transaction should enhance the Group's capital
efficiency through a meaningful reduction in capital expenditure requirements
and improved cash flow, with a benefit to the free cash conversion percentage
of approximately 100 basis points.

 

In-line with Rentokil Initial's balanced capital allocation model, the net
proceeds would be used for general corporate purposes including deleveraging
the balance sheet while continuing to invest in the core business organically,
as well as investing for growth through bolt-on M&A.

 

Andy Ransom, Chief Executive of Rentokil Initial plc, said:

 

"This transaction is a further important step in the execution of our strategy
to focus the company on Pest Control and Hygiene & Wellbeing, where we are
a market leader. Over recent years we have been reshaping our portfolio
towards higher growth markets and lower capital expenditure operations. In
2015, Pest Control accounted for just 44% of Group Revenue, today it's above
80%. This simplifies our business, strengthens our balance sheet, and enhances
cash generation."

 

"This is a win-win deal which will provide additional focus and support for
France Workwear as a standalone business, while Rentokil Initial continues to
focus on the range of growth opportunities in Pest Control and Hygiene &
Wellbeing over the short, medium and longer term."

 

Goldman Sachs International is acting as sole financial advisor and joint
corporate broker to Rentokil Initial plc.

 

Note

 

In FY 2024, France Workwear, including flat linen textile and clean room
business, generated Revenue of $324m, Adjusted Operating Profit of $57m and
had associated capital expenditure of $93m.

 

 

Enquiries:

 

Investors / Analysts: Peter Russell, Rentokil Initial plc, + 44 7795 166506.
Morenike Ogunseye, Rentokil Initial plc, +44 7818 883094

 

Media: Malcolm Padley, Rentokil Initial plc, +44 7788 978199

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