Rentokil Initial has completed the sale of its French workwear business to private equity firm H.I.G. Capital in a deal that values the unit at 410 million euros ($480 million), the company said on Tuesday.
The pest control giant said it expects net cash proceeds of about 370 million euros, which will be used to pay down debt, invest in its core operations, and fund smaller acquisitions.
The divestment is part of Rentokil's strategy to focus on its main pest control and hygiene divisions as it grapples with mounting costs related to termite damage claims in the U.S.
In its half-year results released in July, the company disclosed it had increased its provision for termite claims by $79 million, bringing the total to $276 million as of June 30.
Rentokil attributed the increase to a rise in complex litigation and a 9% increase in the cost per warranty claim during the first half of the year, according to a filing.
"The completion of the Workwear sale is of strategic significance for us, as we execute on our ongoing strategy to focus on our market leading, core businesses," Chief Executive Andy Ransom said in a statement.
Following the sale, pest control will make up about 85% of the company's revenue, with the remainder coming from its hygiene and wellbeing unit.