Rentokil’s (RTO) strategy of combining steady organic growth with bolt-on acquisitions has served its investors very well. Its purchase of Terminix is its biggest ever acquisition and brings with it opportunities and risks. Will it pay off?
Rentokil has been a very successful long-term investment. Over the past decade, its shares have delivered total returns to investors of 528 per cent, compared with 72 per cent from the FTSE-All Share Index.
It has achieved this by delivering steady levels of organic growth from its pest control and hygiene businesses, and has complemented this with bolt-on acquisitions.