In a market condition where M&A is slowing down, some mid-market PE firms are still finding pockets of opportunities. This includes sectors that may not be on top of everyone’s radar. One example is St. Louis-based Thompson Street Capital Partners’ platform in the pest control industry.

“It is a recession resistant, non-discretionary recurring revenue subscription model, has high-free cashflow with little capex or working capital needed,” Thompson Street’s Jeff Aiello tells Mergers & Acquisitions. “It is a large fragmented market with an almost endless pipeline of M&A opportunities.”

Earlier this week, Thompson Street’s PestCo Holdings platform acquired Alliance Commercial Pest Control, which focuses on commercial and residential pest control services across New Jersey, New York and Pennsylvania. The deal marks the sixth for PestCo since it was formed in late 2021. Other recent acquisitions include Mick’s Exterminating.

“Growth is driven by population growth, global warming (warmer climates means more bugs and shorter gestation periods for insects), and a general growing desire for a pest-free environment from the residential consumer,” Aiello adds.

Thompson Street has acquired more than 200 companies across the life Sciences and healthcare, software and technology and business and consumer services sectors since it was founded in 2000. Now the PE firm is betting that people will continue to want bug-free homes. I know I do.

-Demitri Diakantonis