The Boardroom Buzz: Grow, Sell, or Exit

Step back into The Boardroom for the second round of the San Juan sessions. The cameras rolled as Paul brought clients through Puerto Rico for some R&R. Subscribe to The Boardroom Buzz on YouTube to access these upcoming client sit-downs. The current market volatility on top of the Rentokil / Terminix deal brings a lot of unknown to the M&A market. Paul also makes the rounds with updates on Anticimex (including Jarl Dahlfors and David Billingsly), Rentokil, Terminix, and private equity. Black Bear’s service area was home to Chip & Joanna’s Magnolia Mecca as well as a beaver-monikered 200+ gas pump megaplex. While those destinations get all the limelight, it’s hard to quantify the market dynamics surrounding Black Bear just six months ago. The pest industry has benefitted from multiple expansion in recent years. What’s next? Stay tuned for Potomac’s May event, Bubble Trouble. TL;DR if you were thinking about selling soon, then it’s time to accelerate your plans Filmed, Edited, and Mixed by Dylan Seals of www.Verbell.Ltd Additional Videography by Gabriel Gonzalez. Additional Editing by Garrett Ware. To sign up for Bubble Trouble, our May 4th Virtual Event, email events@potomaccompany.com

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Seth Garber’s first venture into the pest control industry lasted four years before selling his Florida-based business. It may be hard to retire from pest control at age 31. It’s even harder to stay away. Seth has already built quite the resume for 41-years young. Finding himself back in pest control, he brings his experience from both health care and high tech.  Seth got sucked back into the industry as a consultant. The three chat about the various consulting methodologies and where Seth sits on the playbook-scale. Now that Seth has boomeranged his way back into pest control, Paul wants to know if Seth sees it more or less competitive now than before. It’s ok for CEO’s to make bad decisions, but is there a tell-tale sign of what makes for a bad CEO?  Pest Daily started as a passion project, but hear about its quick growth trajectory and the variety of courses it offers. What started as leaving a legacy, has grown into an industry leader for education. Maybe you sensed this coming, technology enters The Boardroom discussion. Is there a place in the industry for a gig economy? Speaking of gig economy, Seth shares his tested opinion on customer touchpoints. Stay tuned for a set of soliloquies that cover the gamut from self-development to competition to sacred cows. Maybe next time Seth visits The Boardroom, it’ll be in SethGarberLand’s metaverse. Co-Produced, Edited, and Mixed by Dylan Seals of Verbell.Ltd

Inquiring minds want to know (Patrick included) what Paul’s predictions are for M&A in 2022, especially in light of the Rentokil / Terminix deal. Place your bets people. No one would have predicted four consecutive private equity deals in a row to kick off Potomac’s year. Before stepping in with John Roberts PhD, the two discuss the macro market, and even its effects on BrightView’s earnings report. First recommended to Paul by now Six Flags CEO Selim Bassoul, The Modern Firm, earned The Economist’s business book of the year in 2004. “Nobody, it can now be said, is fully fit to run a modern firm until they have read The Modern Firm” - The Economist There are various ways to modify performance. Monetary incentives through culture. Not the culture that looks like sticking mission and vision statements on the wall. Take a look at the culture of BP as an example, especially in light of Amoco post-integration. Going deeper on culture, Paul argues that culture stems from the founder’s decisions. The conversation takes a turn into a developing country case study. Now it looks like Patrick has his work cut out for him. When is the last time you spoke about path dependence within a culture? Paul adds “Strategy” to John’s “People-Architecture-Routines-Culture”, to help him analyze businesses through his S-P-A-R-C spectacles. Are there alternatives to monetary incentives? Paul invites John to critique his thought process on incentives. Think about your best and worst performers. John gives great insight on pulling up your laggard’s performance. Paul asks about balanced incentives. Join the three in The Boardroom to see if you’re incentivizing for A while hoping for B. Paul is making the entire interview available to his clients. Shoot an email to thebuzz@potomaccompany.com for access. “If it’s not S-P-A-R-C, then it’s P-O-L-E….and yes, there is a benchmark for hookers on a P&L…Mom?” Co-Produced, Edited, and Mixed by Dylan Seals of Verbell.Ltd

It’s time for Paul and Patrick to catch up on listeners’ (and Patrick’s) questions. Episode 80 seems like yesterday, but there’s an update to give on the sentiments surrounding the Rentokil / Terminix deal. Paul lays out his reasons why Terminix franchisees could have a banner exit on their hands. One question on yellow and red flags in financial statements goes down a rabbit’s trail of following trends, benchmarking (Ep 24 with Jarl Dahlfors), getting granular with your chart of accounts (Ep 32 with Doug Stevenson), and managing your business as if you’re going to sell. It’s not too late to go back and give Ep 26 a listen and get your free Chart of Accounts template.  If you’re asking yourself about what an acquirer would say about your write-offs, Paul brings clarity to the confusion. Do you get a pandemic pass for your production? Terminix didn’t according to Tim’s recent episode.  In a different fashion than the self-conscious drop your drawers financial exam, Patrick learns about Paul’s 12-month checkup with acquirers. How do the acquirers stack up against the forward projections in the Potomac CIMs? Don’t miss out on overcompensating employees, trademarks, marketing multi-branch offices, KPIs not found on financial statements, and the “newest edition to our service”.  You’re going to want to get your hands on Potomac’s upcoming Valuation Report. Make sure your sign up for The Commentary at potomacpest.com Almost forgot…. in true Boardroom Buzz fashion, the episode has its own disclaimer. It may be about tax, or it may be about expenses that don’t need to go on the credit card. Co-Produced, Edited, and Mixed by Dylan Seals of Verbell.Ltd

Bill Hoffman breaks down his buy-side basics in the Boardroom. Paul and Bill first met in Philly 15 years ago. Since then, Hoffman’s Exterminating has grown into a serious northeast contender. While the big money buys up businesses, Bill shares his tips on making friends with neighborhood competitors. (Keyword: friends.) That’s the key that unlocked Bill’s now 8-figure business. With 15 acquisitions in the last 6 years, he has experience with integration, payroll, and the growth beyond the acquisition. Hear his take on deal structure, financing, and how he keeps his Brady Bunch business happy. Co-Produced, Edited, and Mixed by Dylan Seals of Verbell.Ltd

It was beginning to look a lot like Christmas for Tim, at least until the news broke of Rentokil making a move to acquire Terminix. Join in as William Blair’s Group Head of Global Services Equity Research Analyst Tim Mulrooney returns to The Boardroom. Speculation abounds in this $7.5 billion deal. In this deal that stretches Across the Pond, what needs to get carved-out and why? There is value to unlock in this deal, and it sounds like the accretion estimates are conservative. There are hidden synergies, including the Terminix turnaround surrounding termite claims and employee retention. Rentokil can knock out one of their competitors at the M&A table while picking up a network of 360 branches. While over in Memphis, it’s hard to turn down a 50% upside. With the recent antitrust precedence, it sounds like Terminix has their work cut out for them to get to their grand finale at the closing table. Terminix has to look at how they’re going to carve out their national account business to pass muster with the DOJ and the SEC. There is a $245 million threshold, but cutting out that revenue is easier said than done. Place your bets on the buyer for “Copesan 2.0”.  There is too much to list here, but you won’t be disappointed as The Boardroom chats about deal risk spread, Terminix franchisees, auction theory, price discovery, and William Blair ratings. Connect with Tim by email at tmulrooney@williamblair.com. You’ve read this far so you too can put up with Patrick’s “low thinking”. Co-Produced, Edited, and Mixed by Dylan Seals of Verbell.Ltd

Grab a beverage, and join the Boardroom conversation about boardroom conversations. John Byrne, former editor at both Fast Company and BusinessWeek, goes into detail on the three collaborative works he did with businessmen Morton Mandel, Jack Welch, and John Scully. The conversation kicks off into his immersive work with Mandel in the book “It’s All About Who”. It’s a book that keeps on giving, or at least gifting. From Paul, that is.  From befriending the books’ subjects to his hours spent in the archives, John dives into the process of distilling their success.  He even shares the unquenchable trait he found between Mandel, Welch, Scully, and other successful businesspeople.  This chat pulls in lessons from outside the route-based service industry. From family business to ranking employees to implementing a factbook system, there is a lot to learn from this accomplished author, editor, and entrepreneur.  Co-Produced, Edited, and Mixed by Dylan Seals of Verbell.Ltd

Peter Schiff argued for gold while denying all things Bitcoin in Episode 56. The Buzz makes its way back to the same table but this time for the flip side of the coin with world-renowned cryptocurrency expert Teeka Tiwari.  Teeka begins by admitting his skeptical start before diving into crypto. With his Wall Street roots, he saw this “magic internet money in 2011” as a flash in the pan. Before diving into Bitcoin, Ethereum, and the myriad of alt coins, Teeka breaks down the blockchain basics. He recalls his Road to Damascus experience when he knew Bitcoin was here to stay. Bitcoin as reserve asset and a speculative asset - is it possible to check both boxes? Hear how Bitcoin compares to gold as Teeka shares his opinion on going back to the gold standard. Watch this San Juan Session in 4K on YouTube. Filmed, Edited, and Mixed by Dylan Seals of www.Verbell.Ltd Additional Videography by Gabriel Gonzalez.

Watch Here You couldn’t ask for better weather as the duo enjoy Cuban cigars on Paul’s balcony. Paul makes time to chat as his firm works on closing out a banner year. Hop on over to YouTube, and watch Paul and Patrick reminisce on 2021 and look ahead to 2022. Merry Christmas from The Boardroom Buzz! Filmed, Edited, and Mixed by Dylan Seals of www.Verbell.Ltd Additional Videography by Gabriel Gonzalez.