The report below aggregates data on EBITDA multiples used in M&A transactions with private pest control companies in 2023. Our team assembled these averages using a combination of publicly-available M&A reports, proprietary data from industry databases, and one-on-one interviews with M&A professionals. (Sources)
We present our results in the tables below. In addition to average EBITDA multiples, we also provide average revenue multiples for pest control companies; although acquirers use them less frequently than EBITDA multiples. Finally, we’ve broken down the data by industry subsector as well as EBITDA/revenue range.
EBITDA Multiples for Private Pest Control Companies, Q4 2023
| Company Type | EBITDA Range | ||
| $500k-1M | $1-5M | $5-10M | |
| Agricultural | 4.9x | 6.2x | 7.5x |
| Commercial | 5.3x | 6.7x | 8.1x |
| Industrial | 5.1x | 6.4x | 7.9x |
| Residential | 5.6x | 6.9x | 8.3x |
Revenue Multiples for Private Pest Control Companies, Q4 2023
| Company Type | Revenue Range | ||
| $1-3M | $3-10M | $10-25M | |
| Agricultural | 1.4x | 2x | 2.6x |
| Commercial | 1.7x | 2.3x | 2.9x |
| Industrial | 1.6x | 2.1x | 2.8x |
| Residential | 1.8x | 2.4x | 3.1x |
The State of Pest Control M&A going into 2024
Pest control companies have been on a steady rise over the first half of the 2020s. With the industry currently sitting at 12.7% CAGR, it is set to generate more than $15B in revenue by 2030. This expansion has proved especially true over the last two years, in which a tightening market has increased buyer competition, resulting in higher valuations. The number of private pest control companies has also seen an increase over the last two years, which rose from 24.5k to 29.2K between Q1 2022 and Q1 2023. 2023 has seen these numbers continue, with the most optimistic projections reaching as high as 32k by the end of the year.
Aside from more recognizable names in pest control (e.g., Terminix, Viking, Aptive), a staggering 78% of the pest control market consists of private companies. Q4 2023 has been overall good to these companies so far, with only agricultural companies experiencing typical seasonal losses (-.1x). By contrast, commercial, industrial, and residential sectors have experienced consistent YoY growth, now rising well beyond their pre-pandemic levels. The trajectory of these subsectors over the last three years is displayed on the chart below:
EBITDA Multiples for Private Pest Control Companies, Q1 2020 – Q4 2023
Pest control M&A is unique in that the majority of buyers are strategic rather than financial, which is unusual compared to other industries we’ve covered (see chart).
Marketing to strategic rather than financial buyers makes earning higher EBITDA multiples dependent on sellers following more industry-relevant criteria, such as specialization in in-demand services like bed bug extermination and fly/fruit fly control. In addition, strategics are looking for a business model optimized for integration with the buying company (e.g., offering services that the buyer themselves do not currently offer)
Moving into 2024, our team has made the following predictions:
- 2024 is going to be especially active. As is the case with many other industries, high interest rates are delaying M&A deals as buyers become more discerning. With these rates expected to begin their decline in mid-2024, our team believes that M&A activity will see a large surge with increases in deal value and volume.
- Residential companies will continue having higher multiples, but not by as much. As the “return-to-the-office” movement continues, we expect to see business activity (and by extent, valuation multiples) for commercial companies increase at a higher rate than in previous years, thus closing the steady lead that residential companies have had on the rest of the industry for the last 5 years.
- Consolidation will likely include other industries. As large strategics seek to fill the holes in their services, they are likely going to turn to related home services subsectors (e.g., HVAC, landscaping, heating & air) to create comprehensive one-stop shops. This provides smaller pest control companies with good positions as either platform or add-on deals, assuming they have the right M&A advisor on their team.
| Related: See our article on the Top M&A Advisory Firms in the US. |
Selling your Pest Control Company
The details of running an M&A deal process are too often discussed behind closed doors, which leaves even experienced business owners unsure of what to do when selling their company. As someone who’s gone through the process several times myself, I’ve made it a personal mission of mine to increase the transparency in M&A by providing data like what’s found in the article above.
In addition, I try to make myself available to speak with business owners seeking third-party advice on the process. If you’d like to talk, you can reach me at the link below or through the contact page of this site.
