‘Steady Eddie’ attracts investors with dependable growth opportunities in the pest control market

The professional U.S. structural pest control market is mature, but that’s a good thing for this “Steady Eddie.” According to Steve Good, a 20-year Terminix senior exec turned consultant, it is not unheard of for pest management professionals (PMPs) in the U.S. collectively to generate $1 billion more in service revenue than they did the previous year.

Steady revenue growth — often 6 percent to 8 percent annually — is just one of many reasons more private equity (PE) investors and venture capitalists are “betting big on the bug business,” said Good, while delivering his State of the Industry keynote address to industry suppliers. About 60 members of the United Producers, Formulators and Distributors Association (UPFDA) feverishly took “Good notes” while attending the group’s spring conference, held April 22-23 at the Westin Fort Lauderdale Beach in Florida.

“More than 50 PE firms currently are circling the professional U.S. structural pest control market,” Good noted. “PE firms already hold U.S. pest control companies generating a combined more than $2.5 billion in service revenue annually. Additionally, they also have manufacturer holdings in this sector with $250 million-plus in combined annual revenue, and distribution holdings in this sector generating more than $400 million per year.”

Good said consolidation the past several decades has been a factor in shrinking the number of players to about 17,000 service providers from more than 22,000 companies. Co-presenter Dave Braness, founder of DataWave Research, LLC, noted the Top 25 revenue-generating pest control companies in the U.S. over the past 20 years have increased their combined revenue from $2.8 billion to $11.5 billion.

Pest control’s “Big Four” continue to bet big on the bug business. Rentokil/Terminix, Rollins, Ecolab and Anticimex together account for two-thirds of the country’s structural pest control professional service revenue — twice as much as the about 17,000 other remaining players combined, Good added.

“Why are PE firms, venture capitalists and large stalwart service providers going ‘all in’ on pest control?” asked Good, president of Memphis, Tenn.-based Good Strategies, LLC. “Well, even as we sit at the precipices of a potential recession — facing record tariffs, hyperinflation and a contracting housing market — pest control is poised for 6-percent growth. The professional U.S. structural pest control market demonstrates continued growth under all types of pressure. Steady Eddie gets it done … seemingly no matter the challenges.”