Pest control firm Exterminators to raise Rs.60mn via IPO

• Offers 20% stake or 10mn shares at Rs.6.00 per share
• Empower Board IPO to open on March 14
• Plans business expansion to Maldives 

Pest control company Exterminators Limited plans to open its Initial Public Offering (IPO) on the Empower Board of the Colombo Stock Exchange (CSE) on 14th of this month offering 20 percent stake or 10 million ordinary voting shares of the company in a bid to raise Rs.60 million to fund its expansion plans.

The price of an ordinary voting share of Exterminators has been set at Rs.6 which is a discount against the fair value of Rs.7.27 per share.
The main business activities of the company are segregated into two, which consist of pest control services and product sales, while disinfection services had also been added in the recent past, which saw a high demand with the spread of COVID-19 pandemic.

Since its incorp oration in 2004, the company has been supporting to enhance the living standards of communities by mitigating the health-risk from life threatening pests and microbes.
In addition, the company also mitigates the risk from structural property infesting pests and prevents food contamination by providing innovative and environmentally sustainable solutions while off setting its carbon footprint.

According to the IPO prospectus, the company plans to setup 3 new branches in Southern and Central provinces by investing Rs.20 million of the IPO proceeds.
“New branch network is expected to contribute approximately 15- 20 percent of the total revenue once all three branches are established whilst the additional investment for equipment and vehicles for Colombo and Kandy branches also expect to derive additional business opportunities,” the prospectus stated.

Exterminators has also identified opportunities in Maldives with many leisure sector establishments requiring pest control services. The company plans to expand its operations to Maldives within next year.

“Since there are product exports already in presence, Exterminators would use these business relationships to select a suitable business partner in Maldives and expects operations to commence in 1st half of 2023 subject to completion of the due process to establish the business,” the prospectus noted.

In addition, Exterminators also plans to invest Rs.12.12 million of IPO proceeds on local manufacturing with plans to export products to selected countries in South Asia, West Asia, Africa, Indian and Pacific Island nations.

For 2021 financial year, the company reported earnings of Rs.14.86 million or earning per share of 39 cents on revenue of Rs.115.61 million.   Atarah Capital Partners (Private) Limited has been appointed as the financial advisor & manager to the offer as well as the sponsor.

According to the prospectus, Exterminators Managing Director Marlon Ferreira holds 82.50 percent stake in the company followed by 15 percent and 1.88 percent stakes by Suhaniya Ferreira and Travis Ferreira.