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*** updated on November 16, 2015 ***
MEMPHIS, Tennessee – Terminix announced the acquisition of certain assets from Alterra Pest Control, based in Provo, Utah. Founded in 2012 by CEO David Royce, Alterra is one of the fastest growing pest control companies in the United States with more than 400 full-time employees in 22 offices in 15 states. The company, ranked 19th on this year’s PCT Top 100 list, had 2014 revenues of $ 44.675 million, up 64% year over year. Royce told PCT that Alterra saw continuous growth in 2015 and is now a $ 75 million company.
“By adding Alterra’s customers and employees to Terminix, we are building on our already strong presence in the residential pest market,” said Bill Derwin, president of Terminix, a subsidiary of ServiceMaster. “This acquisition is a perfect addition to our existing business and allows us to leverage our technical expertise, marketing strength and systems to add value to these new customers.”
“It was an easy decision to sell to Terminix,” said David Royce. “We built this company with core values based on exceptional customer service, environmental stewardship and, above all, a positive team mentality. We were only interested in finding a company that met these high standards and was committed to developing our employees and meeting the expectations of our customers. “
The decision to sell, Royce told PCT, resulted from his desire to restructure the company. As part of the agreement, Terminix will continue to operate Alterra under the Alterra brand; The biggest change, Royce said, is that Terminix will take over responsibility for sales and marketing. Much of Alterra’s growth has been attributed to door-to-door sales and internet marketing. Terminix is a more traditional, recommendation-based sales and marketing organization.
Royce said the sale now allows him “to take a few chips off the table,” but more importantly, he says, “it was a way to invest in and inspire my people to build something in the future . “
The deal marks the third time Royce has sold a pest control company to Terminix. In 2008, Royce, who owned the operations of Moxie Pest Control in Southern California – which at the time was a company with more than $ 10 million in annual sales and serving more than 20,000 customers – sold that business to Terminix. A year later, Royce founded EcoFirst Pest Control based in Las Vegas, Nevada, and after building that company into a $ 24 million company, he sold it to Terminix in 2011.
Royce said he prefers to start pest control startups and sell them – rather than building and maintaining them for the long term – because of the capital it gives him. “I didn’t want to answer to banks or private investment firms telling me that I can’t spend any money on it [creative initiatives]. “
Continuing that business model, Royce said he plans to launch another pest control start-up in the spring of 2016, which will also be headquartered in Utah.
For Terminix, the acquisition continues its growth strategy of organic growth, new services and acquisitions. In the past 12 months, Terminix has also acquired other well-known pest, termite, and wildlife control companies in North America, including Ace Pest Control, Atlanta Pest Control, Bug Busters, Cabot Pest Control, Capelouto Termite and Pest Control, and Excel Pest Control.
The Potomac Company acted as the exclusive financial advisor to Alterra Pest Control. – Additional coverage from Brad Harbison