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  "documentTitle": "Rollins Inc. (ROL)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2023-10-04 00:00:00",
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  "notes": "The table performs a 'bridge' analysis to strip out the impact of the Fox acquisition from Rollins' reported gross margin.",
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      "text": "If we assume Fox's gross margins are comparable, by our estimate, Rollins 40bps year-over-year gross margin improvement is solely attributable to the contribution from Fox.",
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      "text": "Organic Gross Margin: 0.0%",
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      "text": "Based on public comments made by an industry financial advisor whose company advised Fox Pest Control on its sale to Rollins, many door-to-door pest control companies have gross margins as high as 60%-65% or 10%-15% higher than traditional pest control companies. If we assume Fox's gross margins are comparable, by our estimate, Rollins 40bps year-over-year gross margin improvement is solely attributable to the contribution from Fox. We have been led to believe that Rollins made no changes to Fox's business. On the next slides, we show that Rollins downplayed the impact of Fox and claimed numerous factors benefited gross margin. However, we are extremely skeptical of this claim.",
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      "kind": "quote",
      "text": "At the JPMorgan Conf, Sept 19, 2023 the CEO said, \"With a brand like Fox, when we acquire a Fox, we're not focused on integration in the first year.\" — Rollins CEO",
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      "text": "Source: Rollins and Spruce Point Research. Note: Analysis excludes ~$11.8m of revenue from nine (9) additional small acquisitions made in Q2 2023 which we do not believe affects the analysis. 1) “D2D in Pest Control: Past, Present & Future,” PCT, May 2021 2) “PCO Advises Fox Pest Control in 4th Largest Deal in Industry History,” PCT M&A Specialists 3) At the JPMorgan Conf, Sept 19, 2023 the CEO said, “With a brand like Fox, when we acquire a Fox, we're not focused on integration in the first year.” 3) Q4 2022 and Q1 2023 Gross Margin were 50.5% and 50.3%. We use an average of the two quarters.",
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      "text": "Estimated Core Organic Rollins Gross Profit table",
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      "text": "Rollins' Management Made Questionable Claims About Organic Gross Margin Progress Recently....",
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