For PCT’s April 2007 cover story, we chose the headline “The British Are Coming” for an article that explored the impact of UK-based Rentokil’s purchase of Reading, Pa.-based J.C. Ehrlich, which at the time was the fourth largest pest control company in the Unites States. We speculated how this acquisition might change the North America market, as it provided Rentokil with a platform company for expansion into the U.S., Canada, Mexico and Central America.

Indeed, Rentokil used the J.C. Ehrlich acquisition to kick off a series of aggressive acquisitions of large regional pest control operations throughout North America, including Presto-X, Western Exterminator and Steritech. It is now the third largest pest control company in North America with 2016 revenues in excess of $600 million. (PCT has a special report on Rentokil in our September issue).

Since Rentokil embarked on its buying spree, valuations skyrocketed with multiples of 2.5 becoming the norm — not the exception — for strategically important, high-quality pest control firms. It also caused PCOs to take a good, hard look at their succession planning. The sentiment among many in the industry was that multiples were at their pinnacle. Many PCOs who weren’t necessarily ready to sell began to explore this option – whether it was for fear of being left behind, or simply because it was the prudent business decision.

As it turns out, multiples may not be at their zenith and a major reason for this is the entry of a new European player: Sweden-based Anticimex, the subject of this month’s cover story. Already the fourth largest global pest control business, Anticimex made a pair of large U.S. acquisitions in 2016 — Bug Doctor ($6.7 million in revenues) and American Pest ($16.5 million) – and followed those up this year with acquisitions of Viking Pest Control ($26.2 million) and Modern Pest ($17.1 million).

Why has Anticimex set its sights on North America? Very simply, the market is too good for it to ignore. The global pest control market is estimated at $16 billion with almost half ($8 billion, according to Gary Curl and Specialty Consultants’ 2017 “A Strategic Analysis of the U.S. Structural Pest Control Industry” research report) of it being produced in North America. Moreover, 40 percent of the U.S. market is from New York, Florida, Texas and California, meaning that 20 percent of the global pest control market is in these four states.

And Anticimex has the financial backing to make its move in North America. In 2012, Anticimex was sold to private equity firm EQT. With this influx of cash, Anticimex has accelerated its mergers and acquisitions activity. For example, in 2016 Anticimex made 31 acquisitions. In addition to the U.S., Anticimex entered Singapore; by the end of 2016 it was operating in 16 countries with 4,500 employees.

As with any private equity venture, Anticimex’s long-term strategy in North America could change, but in the short-term the company’s U.S. entry is viewed by many as another positive development for sellers. As industry consultant Kemp Anderson noted, “You see Orkin, Terminx, Rentokil and Anticimex all trying to make moves in North America and this influences value for sellers. If you are thinking about selling your business, clearly having the ability to go to global buyers is important.”

For PCOs, there are other ripple effects that make the globalization of the pest control industry fascinating. As reported in this month’s cover story, Anticimex is another high-tech company and their use of technology will push the small to mid-size operator to up their game (“a rising tide lifts all boats.”). Also, the transitioning of large regional pest control companies may provide opportunities for emerging companies. Several PCOs we spoke with said their customers “prefer to buy local,” especially with residential services. Others have reported that their large, regional competitor has struggled post-acquisition, resulting in new business for them. These are important reasons why many large buyers are choosing to maintain the brands of newly acquired companies.

Whether the benefit comes from increased valuation or possible new market opportunities, pest control operators seem to be winners when it comes to today’s mergers and acquisitions activity.

The author is Internet editor and managing editor of PCT magazine.