RKLIF - Voss Capital - Rentokil Initial: Recency Bias Provides Skeptics A Rallying Cry
2024-06-12 00:05:00 ET
Summary
- Rentokil Initial is a global leader in pest control with high-quality business characteristics and attractive growth opportunities in the US market.
- The recent acquisition of Terminix led to a slowdown in North American organic revenue growth, causing the stock to trade at a substantial discount.
- Despite integration challenges, RTO has potential for significant upside as it improves organic growth and re-rates to historical multiples, potentially appealing to PE buyout firms.
The following segment was excerpted from this fund letter.
Rentokil Initial ( RTO )
Rentokil Initial is the global leader in pest control, with more than double the revenue of its next largest competitor. Although it is primary listing is in the UK, over 60% of earnings are generated in North America. Pest control is a remarkably high-quality business with largely recurring revenue, high returns on capital employed, and low cyclicality....
Voss Capital - Rentokil Initial: Recency Bias Provides Skeptics A Rallying Cry