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- Terminix (NYSE:TMX) has the potential to see other bidders come in with a higher bid after the pest control company agreed to a sale to Rentokil yesterday, according to Jefferies.
- "So while we think ~19x is a fair price for TMX, we think there is room for other bidders to come over the top for TMX," Jefferies analyst Mario Cortellacci wrote in a note.
- They are likely two logical bidders that could make a better offer for Terminix (TMX), Cortellacci said. One potential bidder is a private equity company and the other is Anticimex, which is owned by EQT Partners, and has "low single digit" market share in the U.S.
- "Anticimex has been aggressive on acquisition and valuation in the US as it builds out its platform and is the only player that makes sense as a strategic," according to Cortellacci.
- Rollins (NYSE:ROL), another pest control company, likely doesn't have interest in Terminix and a deal would likely see more antitrust scrutiny than a Rentokil deal, Jefferies wrote.
- Jefferies remains a buyer of Terminix (TMX), given the stck remains ~24% below its $58 price target. Terminix shares fell 1.3% today.
- Recall September, Terminix jumps after double upgrade by BofA.