Business Valuations for Pest Control Companies

Pest Control Business For Sale? Buying? – Get A Business Valuation

Pest control companies face unique business challenges, and as such have unique valuation requirements.  Our familiarity with those facets of the pest control business enables our analysts to perform more accurate business valuations for pest control companies.

Quantive’s professionals work with clients to gain a clear understanding of the attributes of the client that may impact value.  Whether that is a low percentage of annual contracts or a market with fast growth, we’ll work with you to understand the drivers of value and quantify them into a throughout valuation analysis.


Who We Work With

Over the years we’ve had a chance to work with a vast number of different types of manufacturers.  Some of those include:

  • General Pest Control
  • Termite Control
  • Commercial PCO’s
  • Residential PCO’s
  • Many others



Considerations for Pest Control Business Valuations

Our valuation professionals try to get a clear understanding of the facts that drive value in your business.  For pest control companies those often include:

  • How much revenue is on annual contract?
  • How competitive is the local market?
  • Is there an active sales effort for the PCO?
  • Is the PCO focused (ie “termite control”) or a general practitioner?
  • How well established is the PCO in the local market?


Models We Consider with Manufacturers

While each valuation is obviously different, we typically will look at one (or more) of the following approaches for business valuations for pest control businesses.

  • Asset Based Approach – What is the net worth of the physical assets of the business?
  • Market Approach – How does the subject manufacturing company compare to those in similar lines of business?
  • Income Approach  – What is the value of the ongoing “benefit stream” of your company?


Pest Control Industry Rules of Thumb

Rules of thumb can be used as a quick approximation of value when you don’t really need to know an accurate number.  For pest control, a commonly used formula is:

  • 0.9 times annual revenue

If on the other hand, you DO need to know a realistic value for your pest control business, a professional valuation analyst can help get an accurate number based on your particular business.


The Pest Control Industry and Valuation

While there are a few major companies in the industry (Terminix (owned by ServiceMaster) and Orkin (owned by Rollins) as well as the pest control operations of Swisher International, Rentokil Initial, and EcoLab), the industry remains highly fragmented.  The top 50 firms in the industry control less than 50% of the market’s revenues.

As a whole, the industry is comprised of approximately 12,000 companies and generates $8 billion in combined revenues.  The industry is characterized by low historic growth rates – often tied to the construction markets.

The fragmented nature of the business is an important facet of business valuations for pest control companies.  Those PCO’s that can scale and organize their business into a more formal, structured operation are likely to see higher valuations.  Likewise, reoccurring revenue from long-term relationships increases value over unscheduled/call-in work.