Image source: Shutterstock

Highlights

  • Agreement signed to sell France Workwear business to H.I.G. Capital for approximately GBP 410 million.
  • Net proceeds expected around GBP 370 million with transaction closing anticipated in Q4 2025.
  • Post-sale revenue expected to be 80% from Pest Control and 20% from Hygiene & Wellbeing segments.

Rentokil Initial plc (LSE:RTO) is a global company providing services primarily in pest control and hygiene and wellbeing. The Group operates across multiple regions, delivering pest management, workwear services, and hygiene solutions.

The company has announced an agreement to sell its France Workwear business to H.I.G. Capital, pending employee consultations and regulatory approvals. The business unit comprises the Group’s workwear, flat linen, and clean room services in France.

The agreed enterprise value for the France Workwear business stands at approximately GBP 410 million, on a cash- and debt-free basis. The sale includes an earn-out provision, allowing for up to GBP 30 million additional payment based on 2026 business performance. Expected net proceeds after closing adjustments are estimated at GBP 370 million. Completion of the transaction is targeted for the fourth quarter of 2025.

With this divestment, Rentokil Initial aims to concentrate its resources and operations on the Pest Control and Hygiene & Wellbeing segments, which will represent roughly 80% and 20% of Group revenue, respectively, following the sale.

The proposed transaction is expected to reduce the Group’s capital expenditure requirements and improve cash flow, which should result in an increase in free cash conversion by about 100 basis points.

Consistent with its capital allocation policy, Rentokil Initial plans to use the net proceeds from the sale for general corporate purposes. These include debt reduction and further investment in its core business, alongside pursuing growth through selective bolt-on acquisitions.

Andy Ransom, CEO of Rentokil Initial, commented that the transaction advances the Group’s strategy to focus on its pest control and hygiene businesses, which now comprise a larger share of Group revenue compared to prior years. The sale is intended to simplify the business structure, enhance balance sheet flexibility, and improve cash generation.

The deal is also designed to provide dedicated focus and support for the France Workwear business as an independent entity, while Rentokil Initial concentrates on opportunities within its core sectors over the near and longer term.