Toptal Finance Investment Banking Case Role Play

Case Context – TT Pest Control

TT Pest Control is a residential pest control company based in the United States. The CEO
founded the company a little over 10 years ago and started as an owner-operator but, since
then, has expanded to 3 locations with 14 trucks servicing customers throughout the Mid-
Western United States.

The pest control sector has healthy margins and is very recession-resistant, making it an
attractive, although often overlooked, industry. However, there are also low barriers to entry.
The industry is very fragmented at a national level, with several large national players and many,
many smaller operators. At the local level, the market is usually dominated by 1-2 key players.

Growing revenue, and especially gaining new customers, is an ever-present challenge. The
CEO, who now focuses on managing their growing business and guiding corporate strategy,
wants to continue to grow TT Pest Control, and take it from being a local player to a regional or
national player in the industry. The CEO estimates that they currently spend $349 on marketing
and sales for each new customer who signs up.

The CEO is considering a few different options to grow the company and would like the help
from a consultant at Toptal to think through the options and determine the best decision.

Options the CEO is considering include:

1. Continue to grow the business organically, acquiring customers for existing locations
and opening new offices when possible
2. Actively consolidate the industry, by acquiring a competing business in the area

If the CEO pursues Option 2, there are two local pest control operators that the CEO thinks may
be a good fit with TT Pest Control. The CEO knows the owners of both companies, and
believes they both may be willing to sell their business.

Target Option 1: Vandalay Pest Solutions

Vandalay Pest Solutions operates out of a single location, in a town about a one-hour drive
away from the head office of TT Pest Control. In the past year, they generated approximately
$850,000 of revenue and achieved an EBITDA margin of 12.5%, servicing approximately 1,900
customers.

Target Option 2: Globex Exterminators

Globex Exterminators is a direct competitor to TT Pest Control, operating in the same area as
TT’s second largest location, but on a much smaller scale. In the past year, they generated
approximately $450,000 of revenue at an EBITDA margin of 15% over a customer base of 950
customers.

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 The CEO of TT Pest Control would like to discuss the options they are considering, get an
understanding of how you would analyze the options, and any preliminary conclusions or
recommendations you might have.

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