Big Buy For Terminix

The world’s largest pest control company gets even bigger with the purchase of Allied Bruce Terminix Companies, its $66 million flagship franchise.

The big keep getting bigger. That’s certainly true of Terminix International, which strengthened its position as the world’s largest pest control company with the recent acquisition of its flagship franchise, Allied Bruce Terminix Companies, headquartered in Mobile, Ala.

The highly regarded franchise, owned and operated by Chairman and CEO Bob Williams, has 76 locations in eight states and annual revenues in excess of $66 million. Considered by many to be the "crown jewel" of the Terminix franchise network, Allied Bruce Terminix was the fourth largest pest control company in the United States before being purchased by the parent company in early January.

Under terms of the transaction, Williams will receive an equity interest in the Terminix subsidiary, which is exchangeable into 8 million ServiceMaster Company shares. As of late January, ServiceMaster stock was trading at about $11.50 per share.

"Allied Bruce Terminix has strong internal growth, high customer retention rates and excellent management," said ServiceMaster Chairman and CEO C. William Pollard. "This acquisition allows Terminix to directly penetrate key medium-size markets in the Sun-Belt, to introduce its termite baiting system to these markets, and to offer other ServiceMaster services to a customer base in excess of 325,000."

A DIFFICULT DECISION.Williams, 71, said selling a business that has been in his family for decades was very difficult. "It took a lot of soul searching, but I felt like it was the best thing to do for our people, for my family and for the future," he said. "You know, you don’t live forever."

With the exception of President Tom Clement, who has decided to pursue other business opportunities after 19 years with the firm, most of the current management team will remain in place, according to Wil-liams. "Terminix is committed to our people and our programs. I would never have sold if they had not made a commitment to our people," he said. "That’s what built the business … our people." It’s a sentiment shared by Norm Goldenberg, vice-president of government and public affairs, licensee operations and technical services for Terminix. "It’s a very well-run company that will be run as a separate region within Terminix. As a result, we will continue to reap the benefits of this successful operation by letting it stand on its own."

The Allied Bruce Terminix buy-out is the second high-profile acquisition of a Terminix franchise in as many years. Johnny Heflin’s Little Rock, Ark., operation — the fourth largest Terminix franchise at the time of the sale with estimated annual revenues of $21 million — was purchased in January of 1999.

"I guess I always knew it would come to this sooner or later," observed David Nimocks III, a third-generation PCO with Terminix Company of North Carolina, the country’s third largest Terminix franchise. "Terminix International has been very aggressive in their attempts to acquire their franchises."

Although saddened to see Williams hand off the day-to-day responsibilities for his business, Nimocks says the veteran PCO leaves with a remarkable record of success. "He was truly one of the best," he said. "I don’t think Bob was as recognized for his business acumen as he should have been. A lot of people assume Terminix franchises are successful simply because they’re Terminix franchises, but Bob was clearly an exception to that rule. I think living under the Terminix umbrella he never was able to shine perhaps as brightly as he would have if he had been an independent businessman."

However, the unassuming Williams never seemed to mind. When contacted by PCT magazine about the sale of his business, he said, "I don’t want to make a bigger deal out of this than it is. I would just say that after a lot of thought and prayer, we just felt that as a family it was the best thing to do."

Despite retiring, Williams will have an ongoing relationship with Terminix International as an "equity partner" and serve on its Board. "I’m not going to ride off into the sunset," he says. "In fact, I’m looking forward to the future."

The authors are managing editor and publisher, respectively, of PCT magazine. They can be reached at dmoreland@pctonline.com; bharbison@pctonline.com