Terminix Acquires Alterra Pest Control

Terminix announced in November the acquisition of certain assets of Provo, Utah-based Alterra Pest Control. Founded in 2012 by CEO David Royce, Alterra is one of the fastest-growing pest control companies in the U.S., with more than 400 full-time employees in 22 branches across 16 states. The company, which ranked 19th on this year’s PCT Top 100 list, reported 2014 revenues of $45 million, a 64 percent increase over the previous year. Royce told PCT that Alterra experienced record growth in 2015 and now has $75 million in contract value.

“We built this company with core values based on exceptional customer service, environmental responsibility and, above all, a positive team mentality,” Royce said. “We were interested in finding a company that met these high standards and made commitments to develop our employees and meet the expectations of our customers.”

The decision to sell, Royce told PCT, allows him to “take some chips off his table,” but more importantly, “it was a way to invest in my people and for them to be excited about building something even bigger in the future.” In spring 2016, Royce will launch a start-up pest control business headquartered in Utah. He will bring with him his Alterra executive team and sales force, including President Vess Pearson, who will be promoted to CEO; Royce will serve as Chairman of the Board.

Terminix will service its newly acquired customers under the “Alterra” brand name. Additionally, Alterra service managers, service professionals and the customer service team will join Terminix (dba Alterra). Perhaps the biggest change at Alterra is that Terminix will take over sales and marketing responsibilities. Alterra’s growth is largely attributed to door-to-door sales and Internet marketing. Terminix is a more traditional, referral-based sales and marketing organization.

The deal marks the third time in which Royce has sold a pest control business to Terminix. In 2008, Royce, who was owner of Moxie Pest Control’s Southern California operations — at the time a company with more than $10 million in annual revenues — sold that business to Terminix. A year later, Royce launched Las Vegas-based EcoFirst Pest Control, and after building that company into a $24 million business, he sold it to Terminix in 2011.

Royce said he enjoys launching new pest control businesses because of the entrepreneurial aspects involved. Each time Royce has sold a company it has provided him with additional capital to grow the next business. “I’ve never wanted to answer to banks or private investment firms telling me that I couldn’t spend money on building company culture or more creative company-wide endeavors.” For example, as the Wall Street Journal reported, Alterra’s corporate office has the feel of a “Silicon Valley” company, featuring an NCAA-regulation-size basketball court, a TruGolf simulator and a 90-inch television permanently tuned to ESPN.

For Terminix, the acquisition continues its strategy of organic growth, new services and acquisitions. “By adding Alterra’s customers and employees to Terminix, we build on our already strong presence in the residential pest market,” said Terminix President Bill Derwin. “This acquisition is a perfect complement to our existing business and enables us to leverage our technical expertise, marketing strength and systems to bring value to these new customers.”

In the past 12 months, Terminix has acquired several well-known pest, termite and wildlife control companies in North America, including Ace Pest Control, Atlanta Pest Control, Bug Busters, Cabot Pest Control, Capelouto Termite and Pest Control and Excel Pest Control. Terminix’s most recent high-profile acquisitions were Schendel Services (a $13 million company) in 2012, and Antimite (a $30 million company) in 2010. The Potomac Company acted as the exclusive financial adviser to Alterra.