Brad Harbison wrote an editorial in the August issue of PCT Magazine entitled, Another M&A (Mergers and Acquisitions) Player Takes a Seat at the Table, discussing PCT’s April 2007 cover story saying:
“we chose the headline “The British Are Coming” for an article that explored the impact of UK-based Rentokil’s purchase of Reading, Pa.-based J.C. Ehrlich, which at the time was the fourth largest pest control company in the Unites States. We speculated how this acquisition might change the North America market, as it provided Rentokil with a platform company for expansion into the U.S., Canada, Mexico and Central America.”He points out how these buying sprees have made big changes in purchases saying: “valuations skyrocketed with multiples of 2.5 becoming the norm — not the exception — for strategically important, high-quality pest control firms.” He also goes on to say this “may not be at their zenith” since it turns out there’s a Swedish company, Anticimex, entered this market with their own buying spree.
He asks and answers his own question – Why? Brad states: “Very simply, the market is too good for it to ignore. The global pest control market is estimated at $16 billion with almost half…..of it being produced in North America".
Although I agree with everything Brad said, but I also see this a bit differently, and I think deeper and wider. It’s clear this is a good investment, but in my view, that’s only surface reasoning. A form of justification if you will. The questions we should be asking are - Is this really business as usual? What’s below the surface?
I’ve spent a lot of my life reading history books and in recent years a lot of time reading books and articles about geopolitical current events. There are things going on in the world that are below the surface but are the driving force for actions and events. None of which are common knowledge. It isn’t that the knowledge isn’t available, it’s that few are reporting on these things and few read about them.
It’s my belief these European companies are coming here to build safe havens against future events that are bound to take place in Europe. We need to understand the world is an economic mess. China’s economy is a false economy based on exports, and central planning. Russia is a massive country with great resources, but it’s an economy based on central planning, neither of which are natural generators of capital.
First, Europe is in deep trouble economically and socially. Ethnic Europeans are breeding themselves out of existence – as is Russia by the way. The EU is a bureaucratic mess creating a regulatory nightmare for all chemical industries in the form of the Registration, Evaluation, Authorisation and Restriction of Chemicals agreement (REACH), which has a Precautionary Principle foundation.
The second reason is the cost of energy. Fracking is changing the world’s geopolitics and as soon as the Congress can catch up and understand that critical point – the changes are going to be more profound.
Third, multiculturalism is destroying Europe. In America, we have the tendency to think well of the concept because America is made up of every culture in the world, as a result we don’t understand it properly. People came here and added color and flavor to the mix – they didn’t come here to destroy the mix and create a new one. But that’s not what multiculturalism is. Multiculturalism is a parasite that destroys the host culture, and it’s disintegrating European society. It’s my view this will ultimately lead to civil wars throughout Europe, and when that happens – Europe will go broke beyond repair and will end up being a third-rate continent, with some nations – like Greece - ceasing to exist.
In the next five years, I’m expecting to see a massive worldwide economic downturn that will have a major impact on every advanced nation on the planet – except the U.S. - where the impact will not be nearly as great for four reasons. The U.S. is the only nation on the Earth that can feed itself, fuel itself, arm itself and defend itself, without the aid of anyone else and even if the rest of the world collapses we will survive in relative good shape.
That’s what I think is the real driving force behind these European company’s initiatives.
Some time back I took umbrage with the idea we should be working to create an arrangement to harmonize the American chemical industry (and the pest control industry) with the rest of the world, especially Europe, and much of what I’ve said above is the reason for being against it. And I still think that’s sound thinking. Europe is a seriously leaking vessel - why would we want to climb on board?
Oh, one more thing. American companies that have been moving overseas for years are going to start coming back, and for three reasons. Lack of stability overseas, regulations and energy. This trend to reduced regulations isn’t going to stop any time soon, and our energy resources are massive and will finally be allowed to be exploited for the nation’s economic benefit. And that’s why I think these foreign owned companies are coming here – they want a safe harbor against a world out of control.
Good thinking on their part.
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