Before we dive into this week’s topic,
Job Board Opportunities keep coming up in the RTC network. This one is from a long-time supporter of Road To Carry, Shore Search Partners:
Shore Search Partners – Investment Analyst (JD Here)
Shore Search Partners is seeking an Investment Analyst to support the evaluation, underwriting, execution, and monitoring of lower middle-market investments via search funds and independent sponsor structures. 1–3 years of experience in investment banking, private equity, or a similarly rigorous and fast-paced analytical role preferred.
Road To Carry is proudly supported by WithCoverage
Your insurance broker makes more when you pay more. WithCoverage doesn't.
Traditional brokers earn commissions, so rising premiums are good for them. WithCoverage charges a transparent flat fee and gives you a dedicated in-house team: an insurance expert, an insurance attorney, a loss control specialist, and a claims manager, who are empowered by visibility and workflow tools (allowing them to give you savings). They close the coverage gaps traditional brokers won't read for and make 40+ A-rated carriers compete on price.
Typical savings of 20-40% on insurance spend. 1,000+ clients. 99% retention. One dashboard for every single portco's policies, claims, COIs, and renewals.
"20%+ cost reduction, better protection, and significant time savings. A total win-win for our portfolio companies and management teams." Robbie Patterson, Partner, Asto Consumer Partners
WithCoverage works with portfolio companies across leading PE Funds like LCatterton, Gryphon, Karp Reilly
State of Play
Alongside HVAC and roofing, pest control gets cited as one of the most active roll up ecosystems (and often used as an example of an uninspiring rollup idea, which is not surprising when a quick google search produces a bunch of banker reports like below…)
Source: Peapack Investment Banking.
There’s a reason why an industry gets PE attention, and as we will talk about with our case study Greenix, PE has done well in the space.
But the industry may be starting to show some cracks:
- The two public companies Rentokil and Rollins are both trading near 5-year low (Rentokil is down ~45% last 5 years and Rollins is down ~11% last 5 years, or ~40% since the peak ~1 year ago)
- Both companies reported slow down in organic growth (on the residential side)
The confusing part is that households do not stop needing pest control. And that stable demand was the PE bet. So what’s the problem? It may be a customer acquisition issue…and AI might be playing a role too.
Let's dive in.