Advent backs China pest control company

Advent, which has deployed more than USD 1.5bn in China in the past decade, closed its largest ever global PE fund last year on USD 25m, citing plans to double down on the country. As recently as September, it acquired a 60% stake in Chinese restaurant operator Wagas Group for an undisclosed sum.

“This deal reflects Advent’s continued commitment to invest in the Greater China region and our confidence in building successful businesses with the support of our global network,” Andrew Li, head of Greater China at Advent, said in a statement.

“LBS has a strong track record in providing pest control and hygiene solutions and quality services to customers. We look forward to helping it grow and expand its footprint in the region.”

Founded in 1998, LBS positions itself as China’s leading pest control company, with an offering spanning germicidal treatment and grease remedial services to internet-of-things-enabled pest monitoring, air purification, and desludging services. Customers include food service companies, retailers, offices, hotels, and private households across 30 cities in Greater China and Southeast Asia.

Pest control is experiencing tailwinds in developing Asia and China in particular, with Advent pointing to industry research suggesting the domestic market will grow around 15% a year for the next five years. “Riding on China’s steadily increasing urbanisation rate and improved hygiene standards, we believe the PCO [pest control operation] sector has strong growth prospects,” Irene Liu, a principal at Advent, added.

Previous activity in this space includes EQT acquiring a majority stake in Guardian Hygiene Service, which claims to be China’s largest domestic operator, facilitating a 3.3x exit for Jade Invest. At the time, EQT – now BPEA EQT Asia following a merger with Baring Private Equity Asia – said Guardian was growing at more than 30% a year.

Advent’s recent activity in China also includes investments in GS Capsule, the largest local medical capsule maker, and BioDuro, a pharmaceuticals industry supplier with some operations in the US. In August 2021, the firm sold its controlling stake in AI Dream, local operator of the Serta and King Koil mattress brands, to Hillhouse Capital.

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• Topics
• Greater China
• Support services
• Expansion
• China
• Advent International