Thompson Street Capital Partners (TSCP) has partnered with pest control industry executive Jay Keating to form PestCo Holdings as a first step to begin a consolidation of the fragmented pest control sector.
Mr. Keating has been active in the pest control sector for more than 25 years beginning as a service technician and rising to become the vice president of operations and chief operating officer at Sears Pest Control in 1998. From 2001 to 2014, Mr. Keating was active in operations and sales for Orkin Pest Control. In 2015, he became the president and chief operating officer of Spraggins, a Florida-based distributor and installer of residential flooring, cabinets, and countertops.
“We are excited to partner with Jay as part of this new endeavor,” said Jeff Aiello, a managing director at TSCP. “There is fierce competition for quality talent in the pest control industry, and after nearly a year of searching we are confident we found the right partner to help us consolidate this industry, drive organic growth, and create a market-leading integrated platform.”
“TSCP has a long and successful track record of executing the buy-and-build strategy in fragmented markets,” said Bob Dunn, a managing partner at TSCP. “With past roll-up successes in retail audiology clinics, commercial fire safety, self-storage, and plumbing/HVAC home services, we believe we have the experience needed to successfully execute on this thesis.”
In February 2020, TSCP began a consolidation of the plumbing services sector with the buy of Len The Plumber, a residential plumbing contractor in the Baltimore-Washington metro area. In April 2021, TSCP completed two add-on acquisitions for Len The Plumber with the buys of Maryland-based Larry & Sons and Pennsylvania-based Neffsville Plumbing & Heating.
PestCo’s targets include residential and commercial pest control companies that exterminate mosquitoes, rodents, termites and other insects. According to TSCP, pest control is a non-discretionary service for homeowners similar to plumbing and HVAC, but also a health and safety-driven concern for commercial applications such as hotels, restaurants and other facilities. It is a recession-resistant service with a revenue model that is driven by recurring subscription revenue, with regular treatments and inspections necessary for ongoing pest protection.
“I am thrilled about the opportunity to work with TSCP to build a leading pest control company,” said Mr. Keating. “TSCP is an ideal partner with a demonstrated track record of working well with founder-owned businesses, demonstrating integrity, exceptional analytical horsepower, and enabling growth by providing the partnership and resources required to build successful companies.”
St. Louis-based TSCP invests in companies with EBITDA between $5 million and $25 million. Sectors of interest include healthcare and life science services, software and technology services, business and consumer services and engineered products. In July 2018, the firm held a final closing of its fifth fund, Thompson Street Capital Partners V LP, at its hard cap of $1.15 billion.
© 2021 Private Equity Professional | November 2, 2021