TOP NEWS: Rentokil Merges Some Workwear And Hygiene Assets With Haniel

LONDON (Alliance News) - Pest control firm Rentokil Initial PLC on Friday said it has agreed to ...

Alliance News 16 December, 2016 | 7:13AM
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LONDON (Alliance News) - Pest control firm Rentokil Initial PLC on Friday said it has agreed to merge its Workwear and Hygiene divisions with Germany's Haniel & Cie Holding Co.

Rentokil said it will receive around EUR520.0 million in cash and an 18% stake in the joint venture, which will merge its Workwear and Hygiene units in 10 countries, mainly in the Benelux and Central & Eastern Europe regions, with Haniel's operations operating under the CWS-Boco brand.

The deal will be carried out by the transfer of the Rentokil businesses into CWS-Boco.

Rentokil will received an annual fixed dividend of EUR19.0 million for five years following completion. Rentokil expects to keep its stake in the venture for a minimum of three years and for an anticipated period of five years, after which it will have various options at its disposal to exit entirely.

Rentokil said its Workwear and Hygiene arms are a good fit with CWS-Boco and said the money it receives from the agreement will be used to invest further in its core Pest Control business and remaining Hygiene services operations. It intends to spend GBP100.0 million on acquisitions in 2017 to pursue this strategy.

Rentokil said the pair are targeting mid-2017 to complete the agreement.

"We are delighted to announce this joint venture with Haniel, a high-quality organisation with people who share our drive for value creation, respect for colleagues and passion for customer service. This is the right deal at the right time and the next step in the implementation of our Right Way plan," said Rentokil Chief Executive Andy Ransom.

"Overall, I believe there is a compelling logic in bringing our respective Workwear and Hygiene businesses together in these European markets, freeing up capital to invest in our higher-growth markets and delivering value for our shareholders," Ransom added.

Rentokil also noted its expectations for 2016 remain unchanged.

By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance

Copyright 2016 Alliance News Limited. All Rights Reserved.

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Security Name Price Change (%) Morningstar
Rating
Rentokil Initial PLC 318.50 GBX 0.22 -
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