EQT Private Equity Asia has bought a majority investment in China’s largest domestic pest control operator, hoping to cash in on China’s urbanisation and consolidate a fragmented sector.
The financial group said its EQT Mid Market Asia III fund made the investment in Guardian Shanghai Hygiene Service, which has a substantial presence in China’s populous southern and eastern provinces.
Financial terms were not disclosed. EQT said Guardian’s founders, Chuck Jiang, Charlie Peng and Steven Gan would retain a minority stake in the company and remain in the management team.
Jiang, a former China head of global pest control company Rentokil, founded Guardian in 2011.
“Guardian holds a strong position in … restaurant chains, supermarkets, shopping malls, airports, hotels and food production facilities,” EQT said in a statement.
“Guardian’s underlying market is supported by favourable demographic trends, including an increasing urbanisation pace, a growing middle class, and new regulatory directives.”
The company also expects to benefit from initiatives such as “Healthy China 2030”, a nationwide policy reform that sets out to encourage more healthy and environmentally friendly lifestyles.
China’s fragmented pest control market allows for attractive opportunities for organic and acquisitive growth, the private equity fund said.
“From an ESG perspective, Guardian continues to improve living conditions in cities through efficient pest control,” EQT said.
“EQT will further support Guardian’s digital innovation of pest control products and services, which is key to decreasing negative environmental and human impacts.”
The investors said by using digital rodent traps, Guardian could lower chemical usage and reduce the number of manual site visits.
“EQT will support Guardian in its next phase of growth through improvements in its digital backbone, including investments in innovation and technology, online marketing strategy and digital service offerings.”
- George Russell
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