Anticimex IPO off for now, EQT to sell Swedish pest control firm to its longer-hold strategy

AFTER six months of deliberating, Swedish firm EQT said on Tuesday that it will retain its ownership of Anticimex, a global pest control specialist with an estimated enterprise value of 60 billion kronor (S$10 billion), instead of exiting the investment.

EQT, together with Anticimex's investors which include Singapore sovereign wealth fund GIC, will hold on to their interests in the pest control group because of its growth prospects and long-term fundamentals. The transaction is expected to close in the fourth quarter of 2021. Its private equity fund, EQT VI fund, has agreed to sell Anticimex to EQT's new longer-hold strategy.

EQT VI fund, which is in the process of selling its assets, had considered all forms of exits for Anticimex, including trade sale and a potential initial public offer (IPO) in April this year - which saw Morgan Stanley, Deutsche Bank and Swedish lender SEB AB organising the global float, according to reports.

Per Franzén, partner and head of EQT Private Capital Advisory Teams, said Anticimex is a great example of a thematic EQT investment.

"Anticimex is a great example of EQT's future-proofing mindset, where embracing innovation, sustainability and new technologies can help reshape a company at its core while making a positive impact. We are confident that Anticimex will continue to thrive for years to come and are excited about the journey ahead."

With Anticimex's digital leadership and smart technology, the company is expected to accelerate the trend "towards more pesticide free and environmentally friendly solutions and increase efficiency in preventing infestations globally".

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"This will contribute to a healthier and cleaner world; and it makes Anticimex an attractive investment proposition for EQT's longer hold strategy and the company's co-investors, including Singapore's GIC," Mr Franzén said.

EQT is Anticimex's largest shareholder. It sold a 9.9 per cent stake in November 2019 to GIC in a deal valuing the business at about 3.6 billion euros (S$5.8 billion). It later brought in Swedish investment company Melker Schorling as a shareholder on similar terms.

Choo Yong Cheen, chief investment officer of Private Equity at GIC, said Anticimex has been generating strong revenue growth with its local branch-level leadership in every market it operates in, coupled with achieving global scale through acquisitions.

"In addition, Anticimex utilises its digital Smart solution of accurate and fast monitoring sensors as well as environmentally-friendly, non-toxic products to be a leading sustainable pest prevention operator," Mr Choo said.

Unlike traditional pest control companies, Anticimex boasts of an intelligent sensor system that constantly monitors and instantly reacts, resulting in better route-planning and efficiency - thus reducing its carbon footprint.

Mr Choo added: "As a long-term investor, we believe Anticimex will bring about positive impact such as keeping societies healthy, reducing societal costs such as food wastage and preventing hazardous events."

Founded in Sweden in 1934, Anticimex offers pest inspections, sanitation, treatment and digital monitoring systems as well as washroom products and fire protection equipment.

In 2019, the company - which competes with the likes of Rentokil and Rollins - posted revenues of about eight billion kronor, serving companies and residential customers across 174 branches in Europe, the Asia-Pacific and the Americas.

EQT acquired Anticimex in 2012. Over the past nine years, it transformed the company from a local, Nordic-focused franchise to a globally leading pest control business, through an ambitious buy-and-build strategy that saw 240 add-on acquisitions. It expanded its geographical presence from six to 20 countries globally, delivering an annual revenue growth of around 20 per cent.

Jarl Dahlfors, CEO of Anticimex, said the company values "persistence, stability and a long-term ownership horizon, which is something we have found in our new owners".

Anticimex, which has a leading market share in Singapore and Australia, intends to continue its Asia-Pacific expansion, targeting markets in Malaysia, Cambodia and New Zealand. The region represents 20 per cent of the company's total sales.

About 90 per cent of its customers in the Asia-Pacific are from the commercial sector, including hotels, restaurants and construction firms; the remaining 10 per cent are retail customers. Nearly 1,700 of its more than 7,000 employees worldwide are in the region.

Anticimex's other investor include Swedish pension funds and institutional investors such as Alecta, AMF and AP6.

EQT has more than 67 billion euros in assets under management across 26 active funds, with portfolio companies in Europe, the Asia-Pacific and the Americas. It began investing in Asia Pacific in 2006.

In May, EQT sold In.Corp Global, a Singapore-based company that provides corporate services, to private equity firm TA Associates. It also invested in Indonesian natural ingredients provider, Indesso Group.