Rentokil Initial forms hygiene services joint venture with Haniel

3 January 2017


EUROPE

Rentokil Initial and Haniel & Cie are to form a joint venture. It will bring together Rentokil Initial’s workwear and hygiene businesses in 10 countries, principally in the Benelux and Central & Eastern Europe regions, together with Haniel’s businesses in 17 countries operating under the CWS-boco brand.

The venture will be formed through the transfer of the Rentokil Initial businesses into CWS-boco, a company owned by Haniel.

The joint venture headed by CEO Max Teichner will be based at the headquarters of CWS-boco in Duisburg.

In consideration for the transfer, Rentokil Initial will receive around €520million in cash and an 18% stake in the joint venture, subject to working capital and other adjustments. It will also receive an annual fixed dividend of €19m for five years.

Completion of the transaction is subject to clearance from the competition authorities and will take place after appropriate consultation with employees. The target for completion is mid- 2017.

In a joint statement issued in December, Rentokil Initial said that the cash received would provide increased capacity for investment in its core pest control and hygiene categories – with guidance for expenditure on bolt-on acquisitions in 2017 now increased to £100m.

Rentokil Initial anticipates maintaining its stake in the joint venture for a minimum period of three years, and for an anticipated period of five years, after which it has various exit options under the agreement to optimise further value for shareholders.

The transaction also provides the potential for a strategic alliance between Rentokil Initial’s pest control business and the joint venture, and the development of hygiene technology to support the venture and Rentokil Initial’s retained hygiene operations.

In continental Europe Rentokil will retain its pest control, plants, specialist hygiene, premium scenting, medical, dental and other operations in the countries in which the Rentokil Initial businesses are transferring to CWS-boco, as well as its workwear and hygiene businesses in France.



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