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Rentokil & Steritech: It’s all about intelligence.

By Augustin Eden, Analyst

The pest control industry is one of those interesting ones. If you’re in it, you want to be good at it. Better than the competition. Once you’re really good at it – the best – presumably that would mean you’re really, really good. The best at killing pests.

The thing is, if you get that good at killing pests, you’re left with two things. Firstly, no pests stupid enough to be got, and secondly a load of pests that have either wised up to your strategy or simply have iron stomachs. Like that guy we all know down the pub who only eats vindaloos. It’s natural selection really, but I should clarify that I’m talking within the home and the workplace here. Not all-out irreversible idiot pest annihilation. After all, they’re not pests unless they’re tunnelling into your bread or getting into your drawers and eating your breakfast cereal – and that’s not a euphemism.

So when we hear of the fun to be had at Rentokil HQ where they’ve built a Big Brother-style house for mice and rats, designed specifically to observe the genius traits of these animals – think baby mice squeezing through holes the size of a pencil; adult climbers using classic bridging and body tension techniques to scale walls devoid of hand and foot holds; that vindaloo-scoffing rat who can stomach all the warfarin you send his way, we’re fascinated. But unfortunately, it’s M&A chatter that we’re really interested in so let’s talk about that.

Rentokil is planning its next move – into the biggest pest-control market of them all: The US. Now one may speculate that Steritech, the market leader on the other side of the pond, has its own Big Brother house in which one can observe young republicans squeezing through loopholes the size of a pencil lead to block perfectly sane legislation just because they hate Democrats, and older ones able to convince entire audiences that they are, in fact, not wearing a toupee. But it hasn’t got one of those. Steritech is in the business of killing more conventional pests. It’s the best at killing pests in the US, and it just got bought by Rentokil.

But isn’t there a concern here that with all this Big Brother style research into rodent resilience, one day, Rentokil will simply win, destroying the one thing its business relies on? Not according to CEO Andy Ransom. While there’s no scientific evidence that points to an increase in the number of rats, they do appear to be getting wiser and developing hardened steel stomachs. “We’re coming across some very rugged rats”, he muses.

In answer to this, Rentokil has developed traps that kill using CO2, which I’d have thought would be one of the first things you’d think of that would be essentially flawless at killing mammals. But even then, you’ll only get the idiots. Like the people who got arrested after the London riots. Useless, really.

So we’re left with that good old friend intelligence. Rats and mice are intelligent, and that’s what will keep the pest control industry buoyant forever. “One of the great things about it (the industry) is that pests will always be with us” says Ransom. And he’s right, on so many levels.

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