Rentokil Said to Weigh €500 Million Sale of French Workwear Unit

(Bloomberg) -- Rentokil Initial Plc is exploring a sale of its French workwear business as the pest control company seeks to streamline its operations, according to people with knowledge of the matter.

The London-listed firm is working with Goldman Sachs Group Inc. to study a possible divestment of the unit, which provides uniforms and personal protective equipment to French clients, the people said, asking not to be identified because the information is private. The unit could be valued at about €500 million ($529 million) in a sale, the people said.

Rentokil has reached out to potential suitors including private equity firms to gauge their interest for the business, one of the people said. Deliberations are ongoing and Rentokil could still opt to keep the assets for longer, the people said. Representatives for Rentokil and Goldman Sachs declined to comment.

Rentokil has been divesting some of its workwear operations as it focuses on its core pest control and hygiene services. In 2017, it formed a joint venture with Franz Haniel & Cie. to provide workwear and hygiene services in Europe and later sold its stake in the JV to Franz Haniel.

Rentokil decided in 2019 to reorganize its French workwear and hygiene businesses as standalone units, and starting in 2022 it began reporting the French workwear operations as a separate business. The unit accounted for about 4% of Rentokil’s revenues in 2023.

The British company has been struggling with the integration of its US business Terminix, which it acquired in 2022. Rentokil stock plunged in September after the firm lowered its growth expectations for the North American business, which accounts for two thirds of Rentokil’s sales. Shares of Rentokil have dropped about 9% this year, giving it a market value of around £10 billion ($12.8 billion).

Activist investor Nelson Peltz’s Trian Fund Management LP amassed a significant stake in Rentokil earlier this year, making it a top-10 holder of the company. Brian Baldwin, head of research at Trian, joined Rentokil’s board in October.