Rentokil Initial plc · LSE:RTO
Rentokil Initial — Merger or Acquisition (December 2021)
21 slides from Rentokil Initial's merger presentation, Dec 14, 2021
Slide 1: Creating the Global Leader in Pest Control and Hygiene & Wellbeing
Creating the Global Leader in Pest Control and Hygiene & Wellbeing 14 December 2021 A Transformational Combination. 0 Restricted - External
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION CONTAINS INSIDE INFORMATION NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION This presentation is not a prospectus and this presentation do
Slide 3: Agenda
Agenda 1. Introducing a Transformational Combination 2. Compelling Strategic Rationale 3. Delivering Significant Value to Shareholders 4. Colleagues, Customers and ESG Andy Ransom Stuart Ingall-Tombs Chief Executive Officer Chief Financial Officer 5. Conclusion 6. Q&A 2 2 Restricted - External
Slide 4: Introducing a Transformational Combination
Introducing a Transformational Combination • Increased scale and leadership in the global pest control market. Compelling • Substantially increased scale in North America, providing an enlarged platform for profitable growth. Industrial Logic • A complementary and synergistic portfolio combination.
Slide 5: Compelling Strategic Rationale
Compelling Strategic Rationale 4 4 Restricted - External
Slide 6: A Combination with a Highly Compelling Industrial Logic
A Combination with a Highly Compelling Industrial Logic Increased scale and A complementary leadership in the and synergistic 01 global pest control 03 portfolio market. combination. Substantially increased scale in North America, An attractive financial 02 providing an enlarged 04 profile. platform
Slide 7: Increased scale and leadership in the global pest control market
Highly Compelling Industrial Logic / 1 01 Increased scale and leadership in the global pest control market Consistent structural growth over • Combined Group will become the leading global pest control the last five years company. • c.4.9 million customers worldwide. • Two outstanding pest control c
Slide 8: Substantially increased scale in North America
Highly Compelling Industrial Logic / 2 02 Substantially increased scale in North America, providing an enlarged platform for profitable growth • The world’s largest pest control market - our strategic focus. North America is the world’s largest • Highly competitive and fragmented, with 20,000 pest c
Slide 9: A complementary and synergistic portfolio combination
Highly Compelling Industrial Logic / 3 03 A complementary and synergistic portfolio combination Executing against a similar playbook • A strong operational and cultural fit, creating significant synergy opportunities. • Complementary service lines and geographic footprint from which to build greater
Slide 10: An attractive financial profile
Highly Compelling Industrial Logic / 4 04 An attractive financial profile • Balance sheet strength to support growth through continued investments in people, innovation, digital technologies and sustainability, and through further M&A. North America Business Mix • Highly cash generative - combined p
Slide 11: Delivering Significant Value to Shareholders
Delivering Significant Stuart Ingall-Tombs Chief Financial Officer Value to Shareholders 10 10 Restricted - External
Slide 12: Creating a Global Leader in Pest Control
Creating a Global Leader in Pest Control Rentokil Initial Combined Group French French Workwear Workwear 6% 4% Commercial Hygiene Pest & Wellbeing Commercial 21% Increased 50% Pest Hygiene FY20 FY20 40% exposure & Wellbeing Rev: Rev: to Pest 32% £2.8bn £4.3bn Residential Pest Residential Pest Pest 6
Slide 13: Terms of the Agreement
Terms of the Agreement • Aggregate consideration of approximately 643.3m new Rentokil Initial shares (in the form of ADSs) and approximately US$1.3bn in cash. • Values Terminix at US$6.7bn, implying a value of US$55.00 per Terminix common stock and represents aggregate consideration mix of 80% stock
Slide 14: Value Creation: Synergies & Integration
Value Creation: Synergies & Integration • Annualised pre-tax net cost synergies of at least US$150m (£113m) by the third full year post completion. • Run rate synergies expected to accumulate c.30%, c.80% and 100% in the first, second and third 12 month periods respectively, post completion. • Expec
Slide 15: Committed to Medium-Term Growth Targets
Committed to Medium-Term Growth Targets Following completion of the Combination, Rentokil Initial will continue to target the medium-term annual growth rates set out at the Company’s Capital Markets Day on 28 September 2021: • Ongoing Revenue growth of 6% to 9% • Organic Revenue growth of 4% to 5% •
Slide 16: Timing to Completion
Timing to Completion • Transaction expected to close in the second half of 2022 subject to, amongst other things: • obtaining shareholder approvals from Rentokil Initial and Terminix shareholders; • obtaining U.S. regulatory approval; and • approval of the new Rentokil Initial shares for listing on
Slide 17: Attractive Proposition for Shareholders
Attractive Proposition for Shareholders • Combined Group's margin profile and operating scale efficiencies will enable it to reduce its Margin Profile costs and increase overall efficiencies. EPS Accretive • Expected to deliver mid-teens percent accretion in the first full year following completion.
Slide 18: Colleagues, Customers and ESG & Conclusion
Colleagues, Customers and ESG & Andy Ransom Chief Executive Officer Conclusion 17 17 Restricted - External
Slide 19: Colleagues, Customers and ESG
Colleagues, Customers and ESG • Combined c.56,000 colleagues (Terminix: 11,400 people, Rentokil Initial: 44,500 people): • Shared strong culture and values; continued investment on highly trained colleagues. • Opportunities to share retention and recruitment best practices. • Fostering a “best of br
Slide 20: Creating the Global Leader in Pest Control and Hygiene & Wellbeing
Creating the Global Leader in Pest Control and “These are two highly complementary Hygiene & Wellbeing businesses with a similar operational playbook focused on supporting great people to provide outstanding customer Increased scale and leadership in the 1. global pest control market service across
Slide 21: Q&A
Q&A 20 Restricted - External
Rentokil Initial — Merger or Acquisition (December 2021) on 6ix