LONDON: Rentokil Initial plc has entered into an agreement to sell its France Workwear business to H.I.G. Capital in a transaction valued at approximately €410 million ($465 million), the company announced Wednesday.
According to details, H.I.G. Capital has signed a binding put option, committing to complete the acquisition once consultations with employee representatives and regulatory approvals are finalized. France Workwear includes Rentokil Initial’s workwear, flat linen, and clean room business in France.
The deal, expected to close in the fourth quarter of 2025, will yield estimated net cash proceeds of €370 million ($420 million), subject to adjustments and an earn-out mechanism worth up to €30 million ($34 million) based on business performance in 2026.
The divestment aligns with Rentokil Initial’s strategic focus on pest control and hygiene & wellbeing services, which will now account for approximately 80% and 20% of company revenue, respectively. The move is also expected to enhance capital efficiency by reducing expenditure requirements and improving cash flow, with a projected 100 basis-point increase in free cash conversion.
“Our strategy is to focus on Pest Control and Hygiene & Wellbeing, where we are a market leader,” said Rentokil Initial CEO Andy Ransom. “This deal simplifies our business, strengthens our balance sheet, and enhances cash generation.”
Goldman Sachs International is serving as Rentokil Initial’s sole financial advisor and joint corporate broker for the transaction.
In FY 2024, France Workwear, including flat linen textile and clean room business, generated Revenue of $324m, Adjusted Operating Profit of $57m and had associated capital expenditure of $93m.