Rentokil Closes Paragon Professional Pest Control Products Business

READING, Pa., and MEMPHIS, Tenn. – On April 1, Rentokil shuttered distribution business Paragon Professional Pest Control Products.

Rentokil noted in its March 7 earnings report, “As part of the Terminix merger, Rentokil acquired a small product distribution business, Paragon, with revenue of $68 million and profit of $4 million in 2023. This business is largely dependent upon a single, partially exclusive supplier relationship, which will be discontinued with effect from April 1, 2024. As a consequence, the decision has been taken to close this business.”

Paragon was the master distributor for a number of suppliers, according to David Helt, president of distributor Target Specialty Products, also a part of Rentokil. “Paragon was an option for distributors to purchase product. Paragon did have, across several suppliers, some proprietary products, and for those products, distributors had to buy through Paragon.”

One of those suppliers was BASF, which, according to industry sources, sold non-agency products to Paragon — so distributors had to then source these BASF products from Paragon. However, BASF agency products like Termidor were handled directly with distributors. Several industry sources told PCT that BASF was the distributor whose decision to end its supplier relationship with Paragon led to its closure. A BASF spokesperson provided PCT with the following statement: “As a leading supplier, we are committed to delivering innovative solutions and continuing to strengthen our ability to drive growth for both BASF and our distribution partners. We appreciate Paragon’s support for the pest control industry over the years.”

Paragon’s history in the pest control industry went back to 1981, when it was formed by Terminix. Throughout the years, manufacturers like BASF benefitted by selling to a master distributor, mainly from only having to ship products to one location and only having to invoice a single distributor. Paragon became part of Rentokil when it acquired Terminix in 2022. Since that merger, there was speculation within in the pest control industry as to whether or not Paragon and Target Specialty Products could co-exist within Rentokil.

Helt said it is important to distinguish that Rentokil’s decision to close Paragon is not related to Target Specialty Products. “This is not a start of anything like distribution starting to close down businesses again,” he said. “That was absolutely not the strategy. With the supply agreement ending, and what was left of the Paragon business, the board made the decision to close the business.”

For Paragon employees, the news was bittersweet. Craig Smith, who has served as division manager of Paragon the past two years, told PCT he was surprised by the decision. “We were looking to add more sales reps to really create more energy. Paragon is somewhat well known, but there was a lot more potential, a lot more that could have been done in terms of developing better relationships and better sales strategies. I was very excited. There was ample opportunity to grow.”

Helt said that Paragon employees “are actively exploring opportunities within Rentokil.”

Sources told PCT that the major industry impact will be on smaller suppliers because other distributors that buy through Paragon could “mix and match” pallets, which allowed them to order smaller or larger quantities as needed. It provided more flexibility for customers ordering fewer products.