Former Rentokil Initial higher-ups launch brokerage group

Thursday, July 19, 2007

SAN ANTONIO--Former president and chief executive officer of Rentokil Initial's North American operations Michael Schroeder has with his former colleagues launched the Titan Brokerage Group, a professional transaction firm that will specialize in the sale, acquisition, transfer or merger of businesses in the mid-market range. Schroeder will serve as president and chief executive of the new firm, and is joined by former Rentokil executive board member Clive Ward, who will serve as Titan managing director for the UK and Europe, and Titan vice presidents for North America Kevin Ward and Edward Fleury. Fleury was director of acquisitions in North America for Rentokil; Kevin Ward was the president of Rentokil Pest Control & Washroom Services for North America.
The four have extensive experience in the man-guarding and electronic security industries, and Schroeder said that Titan will not specialize in the security space, but "we have a level of expertise in that industry, having acquired a number of companies in that space over the years. We understand the needs of the buyers in the industry, having been the buyers ourselves, and we think we have the right expertise to represent sellers looking to exit their businesses." He speculated that Titan would be working largely with companies doing between $5 and $50 million in annual revenue across the service industries.
The four principals will be located in San Antonio (Schroeder), New York (Fleury), Cleveland (Kevin Ward) and London (Clive Ward). Schroeder said there was particular interest on the part of UK and European companies in buying into the U.S. security marketplace. "We think the growth rates in the United States are quite high," he said. Security "electronics is a robust sector and we see that continuing."

He doesn't feel that the weakening U.S. dollar will affect trans-Atlantic deals. "Investing in the United States right now, you can get in cheap," he acknowledged, "but once it strengthens, you can be adversely impacted by that." He predicted that, "A lot companies will hedge their funds and try to take the risk out of it. A sophisticated buyer will not be significantly deterred from making an investment."
As for advice he'd offer integrators looking to exit? "The higher they can get their recurring revenue as a percentage of their overall revenue, the better," he said. "The higher the recurring revenue, the higher the multiple the integrator will get. That's a pretty safe equation in my view ... And one of the biggest things is having a backlog or pipeline that gives an acquirer a comfort level that the business is an ongoing business and has incoming revenue streams."