Rollins, Inc.

2170 Piedmont Road NE
Atlanta, Georgia 30324
U.S.A.
Telephone: (404) 888-2000
Web site: http://www.rollins.com

Public Company
Incorporated: 1948 as Rollins Broadcasting, Inc.
Employees: 13,126
Sales: $1.67 billion (2017)
Stock Exchanges: New York
Ticker Symbol: ROL
NAICS: 561710 Exterminating and Pest Control Services

Rollins, Inc., operates the largest pest control services company in the United States, working through company-owned branches and subsidiaries and independent franchisee operations to protect its customers from cockroaches, bedbugs, termites, rats, and other pests. The company also has an extensive international network of franchisees and subsidiaries serving more than 2 million customers worldwide. The lion's share of Rollins's revenues come from its well-known international Orkin brand, but it also operates a growing list of regional subsidiaries, including HomeTeam, Northwest Exterminating, Critter Control, and others. Although the company's stock is traded publicly, it is majority owned and operated by the descendants of its founder, O. Wayne Rollins.

Rollins, Inc., began as Rollins Broadcasting, Inc., during the 1940s, although the company's Orkin Pest Control business is older, having been founded in 1901 and acquired by Rollins in 1964. Rollins Broadcasting was cofounded by O. Wayne Rollins, who was raised in rural Georgia and worked in a cotton mill during the Depression era, and his brother, John Rollins. Together, they formed in 1948 Rollins Broadcasting, a partnership that was based on a simple strategy: Wayne Rollins would acquire a small Virginia radio station that would advertise his brother's car dealership.

Wayne Rollins became president of Rollins Broadcasting and guided an expansion of its media interests that by 1960 included six radio stations and three television stations in the eastern United States. In 1961 the company went public and was listed on the American Stock Exchange. That same year the company began diversifying, acquiring Tribble Advertising Company of Texas and launching its outdoor advertising/billboard business. In 1962 Rollins acquired its 10th broadcasting station with the purchase of its first West Coast media operation, KDAY radio station in Los Angeles.

Rollins expanded its outdoor advertising business in 1963, when it acquired Vendors S.A., a Mexican company that marked Rollins's entry into international business. During the first half of 1964, Rollins acquired Satin Soft Cosmetics and also entered the citrus-fruit growing business, planting groves on acreage it had acquired in south-central Florida during the late 1950s.

In mid-1964 Wayne Rollins led what is believed to have been the first leveraged buyout in history, when his rapidly diversifying company acquired the Orkin Exterminating Company for $62.4 million, a figure nearly seven times that of Rollins Broadcasting's revenues that year. At the time of the Orkin acquisition, the family-run Atlanta-based pest control business was beset with squabbles that at one juncture led family members to commit the company founder, who was known as “Otto the Rat Man,” to a mental institution. Although Wayne Rollins knew little about pest control, he used his connections with Delaware's Du Pont family to help secure financing from the Chase Manhattan Bank and the Prudential Insurance Company, which funded most of the acquisition costs.

With more than 800 offices in 29 states and Washington, DC, Orkin gave Rollins a service company to which Rollins could apply advertising and merchandising operations. For a time, the buyout served as a case study at the Harvard Business School, representing the first time that large institutional investors backed a smaller firm buying a larger company and lent money on the basis of potential earnings rather than on the base value of Orkin, setting the stage for an acquisition that Wayne Rollins compared with “Jonah swallowing the whale.” The deal also became emblematic of other future Rollins acquisitions, with Rollins later acquiring several family-owned businesses based in southern states that offered cross-marketing opportunities.

Soon after acquiring Orkin, Rollins entered the professional building maintenance service business with the acquisition of another Atlanta-based business: the L.P. Martin Maintenance Corp. (renamed Rollins Services), which had operations in 10 southern states. In 1964 and 1965 Rollins also took over several smaller pest control firms, including the Dettlebach Pesticide Corp., a manufacturer of pesticides, insecticides, and rodenticides; and Arwell, Inc., a midwestern termite and pest control firm.

With the name Rollins Broadcasting no longer reflecting the company's scattered interests, the company changed its name to Rollins, Inc., in 1965. By 1966 Orkin's operations had been expanded to 1,000 offices and had followed the Rollins billboard business into Mexico. The following year Rollins relocated its corporate offices from Wilmington, Delaware, to the Orkin headquarters in Atlanta, and in 1968 Rollins began trading on the New York Stock Exchange. Moreover, the company also entered the wall covering and decorating business with the purchase of the Atlanta-based wholesale distribution firm Dwoskin, Inc., and its subsidiary Dwoskin Decorating Company.

In 1968 the Federal Communications Commission (FCC) refused to renew the operating license of one of the 12 radio stations owned by Rollins at that time, WNJR in Newark, New Jersey, one of the first radio stations in the United States to tailor programming specifically to African-American audiences. In failing to renew the license, the FCC cited gross misconduct and fraud by station managers who concealed the relationship between the station and an advertising agency and charged that home office officials failed to exercise adequate control and supervision over the station. The FCC ruling was later upheld when the U.S. Supreme Court refused to hear a Rollins appeal.

In 1969 company sales rose above $100 million for the first time. By the end of the decade it had formed Rollins Protective Services (RPS), initially a subsidiary, which became a pioneer in the security field after developing one of the first affordable wireless early warning burglar and fire alarm systems during the 1970s.

During the early 1970s Rollins continued diversifying by acquiring the consumer cooperative United Buying Service and the oil and gas field services operation of Patterson Services, a leading supplier to oil and gas companies and drilling contractors in the Gulf Coast area. During the same period, Rollins also expanded its home decorating operations with the acquisitions of the Star Wallpaper & Paint Company, the Carole Textile Company, and Marks Custom Draperies, Inc. In 1973 the company's Dwoskin division, which had become the country's largest wholesale distributor of wall coverings, began serving as the sole distributor of Ultra-Ease, a prepasted vinyl-coated wall covering that was developed by the Du Pont Company.

R. Randall Rollins, the son of Wayne Rollins, succeeded his father as president in 1975 while the company cofounder remained as chair and CEO. In 1975 the company sold the Dwoskin operations and closed the year with revenues of $213 million and earnings of $19 million. In early 1976 Rollins became the first U.S. company to formally announce that it had made and would continue to make payoffs to local Mexican government officials (which was not illegal under U.S. law) to conduct business across the border. In a voluntary disclosure statement filed with the U.S. Securities and Exchange Commission, the company reported that it had paid Mexican officials $127,000 over a five-year period, helping the billboard business earn about $10 million. After receiving negative publicity from the disclosure, Rollins announced in late 1976 that it would discontinue questionable payments to Mexican officials.

In 1977 Rollins began operating its second cable television system, in New Haven, Connecticut, and around the same time it completed a new, expanded Plattsburgh, New York, television station, which began broadcasting across the northern U.S. border to Montreal. That same year Orkin Pest Control, hoping to benefit from another cross-marketing opportunity, launched a lawn care operation to compete for business in that growing industry. Between 1978 and 1981 Rollins abandoned its consumer cooperative, business services, and custom drapery operations by discontinuing the United Buying Service and selling Rollins Services, the Carole Textile Company, and Marks Custom Draperies.

In 1980 the company's annual sales surpassed $400 million for the first time, after nearly doubling in five years, as earnings rose above $35 million. In 1982, drawing on Orkin's history of serving residential customers in environmentally sensitive markets, Rollins created a separate lawn care entity, Orkin Lawn Care, offering fertilization, weed and insect control, seeding, and aeration services.

During the early 1980s Rollins began acquiring and operating numerous cable television franchises in Massachusetts and Rhode Island. In 1982 a local attorney representing Rollins in Danvers, Massachusetts, was convicted of offering a town official a $50,000 bribe to help Rollins secure a franchise there. Rollins was never implicated in the bribe, and following the conviction, the Danvers Town Council voted to grant a franchise to Rollins, although the cable license was revoked in 1983 by a state consumer agency.

RCI and RPC were then spun off to shareholders, with Rollins family members retaining significant stakes in each. Wayne Rollins remained chair and CEO of Rollins, Inc., and became chair and CEO of RCI; Randall Rollins became senior vice chair of Rollins, chair and CEO of RPC, and president of RCI; and Gary Rollins, Wayne's younger son, became president of Rollins, Inc., and assumed the bulk of operational control over the new Rollins, Inc.

With the ability to channel capital that its service divisions had earned back into the company, Rollins, Inc., bought back more than a million of its shares for acquisition purposes and purchased companies that operated in all three of its principal business segments. In 1985 RPS increased its scope of operations in Cincinnati, Columbus, Dallas, Houston, and St. Louis with the acquisition of Warner Amex Security Systems, a home security business that provided Rollins with a hardwired security system product line (generally used in commercial application) to add to the company's established line of wireless systems. The company's pest control business also expanded in 1985 through acquisitions, including that of the Ace Pest & Termite Control Company, which gave Orkin an entrance into the Southern California market.

Between 1984 and 1987 Orkin Lawn Care, in an attempt to pull its operations out of the red, expanded its reach from the Southeast across seven Sun Belt markets from North Carolina to Texas. In 1987 the lawn care division further extended operations into the Midwest and Northeast with the acquisition of Amcare, Inc., which gave Orkin Lawn Care an additional 24 branches and doubled to more than 40 the division's number of locations.

Also in 1987 the company acquired two pest control firms, including Abalene, the largest operation in New York and New England. By that point Orkin controlled about 10 percent of the U.S. pest control market, followed by Terminix, Inc., with about 6 percent, and accounted for about 90 percent of Rollins's revenues and earnings. After media properties became a hot commodity on Wall Street, the Rollins family sold its interest in RCI for $600 million, propelling Wayne Rollins into the ranks of the world's 400 wealthiest. Moreover, Forbes magazine named Rollins, Inc., the nation's top-performing service company in 1986, a distinction it would hold for several years. However, within a few years Terminix would eclipse Orkin as the world's largest pest-control company.

The Federal Trade Commission (FTC) soon ruled that Orkin Exterminating had unfairly raised its renewal fees in 1980 after earlier guaranteeing certain customers fixed fees. The company was ordered to roll back fees, although it was allowed to retain the $7.5 million it earned as a result of the increases. Orkin, which had cited inflation as the impetus for its fee increases, appealed the decision, which was ultimately upheld when the U.S. Supreme Court let the FTC ruling stand. After the initial FTC ruling, a federal court found Orkin guilty of improper use of pesticides during a home fumigation, which allegedly caused the death of a Virginia couple, and was fined $350,000. In 1988 Orkin's pest control operations were hurt by industry-wide regulatory changes after the U.S. Environmental Protection Agency banned chlordane, a widely used termiticide. Rollins responded to the new regulations, which took effect in the midst of Orkin's research into a new foam termiticide, by establishing new customer relations and public relations departments that focused their efforts on public education.

During the late 1980s Orkin Lawn Care acquired Village Green, Inc., which operated in Connecticut and New York, and Easy-Lawn, Inc., which operated in South Carolina. Initially, Orkin Lawn Care treated lawns with sprays, but in 1988 it converted its treatment process to a combination of wet and dry granular applications, allowing the company to change its vehicle fleet from tankers to smaller and more economical vans. Despite having expanded to a peak of 56 branches by 1988, Orkin Lawn Care had generated little profit since its formation six years earlier. Faced with an industry slump and increased competition, the lawn care division began consolidating some operations and added a complete tree and shrub program to its services. Continuing to persist toward a goal of profitability, the lawn care division entered the commercial market in 1989 while pushing its territory westward, acquiring Yearound Lawn Care Experts, a West Coast company with branches in San Diego, Los Angeles, Sacramento, Portland, and Seattle.

Around the same time, RPS opened an expanded Technical Center in Atlanta, upgraded the computerized operating systems at its three alarm monitoring centers, acquired two security firms, and entered the Chicago residential security market. In 1989 Orkin, the only pest control business that maintained a continuous national television and outdoor advertising program, launched its “Exterminator” advertising campaign, which was designed to reinforce the recognition of Orkin's name while using the robotic Exterminator to suggest that the firm was the service company of the future. In 1989 Rollins's sales climbed above $400 million (the first time since the 1984 spinoffs), while its profits remained flat due to unusual weather conditions that reduced the termite swarm period and delayed the start-up season for lawn care.

During the slow-growth period of the late 1980s Rollins began focusing on lowering turnover among employees by initiating a program that increased employee recruiting, training, and compensation. Early the following decade, Rollins initiated a total quality improvement plan, beginning with corporate management and designed to eventually touch the company's entire workforce with additional quality training.

Rollins entered the 1990s with a new division, a new foam termiticide, and new security systems. In 1990 Rollins formed Orkin Plantscaping to sell and rent flowering and green plants principally to commercial customers such as upscale hotels, office buildings, and shopping malls. That same year the Orkin Termite and Pest Control division, after four years of development work, became the first business in its field to employ a foam termiticide. The pest control division, seeking ways to develop low-cost sales leads, also introduced a toll-free phone line that offered free termite inspections in conjunction with its Exterminator commercials. In 1990 RPS launched a new automated alarm monitoring system and introduced the Rollins System VI and the hardwired Vista LX System. The System VI, consisting of a network of alarm sensors and devices that communicated directly with one of the company's three, 24-hour alarm monitoring centers, featured one-touch system activation, multiple zone security, and house lighting controls, while the Vista LX system combined hardwired and wireless features.

In 1991 O. Wayne Rollins died unexpectedly after entering a hospital for a pacemaker implant. A near-billionaire and one of Florida's largest landowners and biggest cattle ranchers, Rollins had an estimated net worth of $930 million and had been one of Atlanta's most generous philanthropists. Randall Rollins succeeded his father as chair and CEO while Gary Rollins remained president.

In 1991 the company launched a “Zero Pest” guarantee that was designed to attract premium commercial pest control accounts from sources such as upscale restaurants and major hotels as well as to complement the company's toll-free inspection hotline, which was generating increasing numbers of residential sales leads. That same year RPS introduced its Quality-Plus system, which targeted the middle-income family and small business markets, and the following year the security division expanded its cross-marketing programs with other Rollins operations and opened new commercial offices. In 1991 Orkin Plantscaping acquired operations in Dallas, Nashville, and Denver, and the following year it purchased operations in Portland, San Diego, and Seattle, as it became the second-largest plantscaping concern in the country. In 1992, with increased sales generated by three of its four divisions, the company's revenues rose more than $50 million and climbed above $500 million for the first time, to $528 million, while its net income rose to $38 million.

Although the company's pest control, security, and plantscaping services were growing during the early 1990s, Orkin Lawn Care continued to struggle, resulting in further departures from unprofitable markets. In 1991 Orkin Lawn Care abandoned California, and the following year it bowed out of parts of the Northeast and Midwest. A slowing of industry growth and an increase in competition caused the lawn care operation to boost its prices and redirect marketing activities to focus on direct sales and forced the operation to retreat from some of its territory. By 1993 the lawn care division had been pared back to a 32-branch area, largely in territory familiar to Rollins: the Southeast and the Sun Belt region.

Rollins, Inc., moved into the mid-1990s with the Rollins family owning in excess of 41 percent of the company's common stock and occupying three of its seven director seats. The Orkin Pest Control division continued to pace the company's revenues and earnings and had only one national competitor in the nearly $4 billion pest control industry, which was fragmented and growing, and still in the process of slowly consolidating.

Rollins anticipated increased acquisition activity—which had slowed considerably during the late 1980s and early 1990s due to high asking prices—particularly in the area of local and regional pest control operations and possibly those that could extend operations into Canada and Europe. RPS, which generated about 10 percent of the company's revenues, appeared to be gaining momentum as it increased cross-marketing programs with other company divisions and expanded its product line in both residential and commercial market segments. Rollins was also hoping that its plantscaping operation, which generated about 5 percent of the company's annual sales, could become the first national concern of its kind.

However, Rollins changed its strategy in 1997, divesting the lawn care, plantscaping, and protective services businesses to focus on pest control. It continued to acquire smaller companies, adding Prism and Redd Pest Control in the United States. It also bought PCO Services, Inc., Canada's largest pest control business, which had been formed in 1952. The PCO buy and other acquisitions were aimed at growing the relatively neglected commercial side of the business.

Orkin was still dealing with a termite crisis that resulted from the less-effective chemicals used to replace the banned chlordane. There were numerous lawsuits, and Orkin modified its lifetime guarantee policies to cover fixed terms instead. Meanwhile, Orkin continued to innovate in this area, and by 2008 it was offering certain West Coast communities a service to kill termites by applying heat.

Rollins, Inc., counted $677 million in revenues in 2003 as Terminix, its chief rival, approached the $1 billion mark. Glen Rollins, the son of Gary Rollins, became president and COO of the Orkin subsidiary in February 2004. He had been involved with the business since beginning as a teenager as a termite technician's assistant and boasted experience at a wide variety of jobs within the company. He was expected to eventually succeed his father as CEO of Rollins.

In March 2004 Rollins made its largest acquisition since buying Orkin, paying $110 million for Western Industries of Parsippany, New Jersey. Established in 1928, Western had been run by the Sameth family. The deal, which brought with it Western Pest Services and Western Fumigation, boosted Orkin's business in the Northeast, where it previously had relatively little penetration. Western had pest control revenues of $72 million in 2003. The Western deal also included a chemicals business, the Residex Corp., which was soon divested.

Rollins continued to strengthen its commercial segment. In 2005 it acquired the Industrial Fumigant Company (IFC) of Olathe, Kansas. Founded in 1937, IFC specialized in the food and commodity industries. Rollins had revenues of $802 million in 2005 and a net income of $52.8 million. Three years later, in 2008, its revenues exceeded $1 billion, while its net income reached $68.9 million. The company was slowly adding international Orkin franchises, particularly in the Middle East and Latin America.

Acquisitions continued in the United States. In April 2008 Rollins bought HomeTeam Pest Defense, Inc., and associated companies for $134 million. HomeTeam was one of the nation's largest residential pest control businesses. Formed in 1996, it boasted a unique in-wall system that it marketed to builders. The deal added 1,500 employees and boosted residential sales by one-fifth.

In December 2008 Rollins acquired Crane Pest Control, Inc., a San Francisco firm that dated to 1930. Crane operated in Northern California and the Reno, Nevada, area and had annual revenues of more than $10 million. Orkin announced that Crane would be allowed to operate independently under its own brand name, because it was said to inspire a great deal of loyalty in its home market.

During the summer of 2010 Glen Rollins and several of his siblings filed suit against their father, Gary Rollins, and his brother, Randall Rollins, over the administration of trusts that had been set up for them decades earlier by their grandparents. Meanwhile, Gary Rollins's wife filed for divorce. Evidently in response to one or both of the suits, Glen Rollins was then fired as the president of Orkin.

The various court battles dragged on over several years, reaching as far as the Georgia Supreme Court as the fractured clan hammered out its differences. Despite the turmoil within the Rollins family, the Rollins company continued to grow, with a new emphasis on international expansion. In 2013 Orkin set up franchises in the Caribbean markets of Trinidad and Tobago and St. Lucia, along with franchises in Iraq and Guam. At the beginning of 2014 the company acquired Allpest WA of Perth, Australia, marking its first foray into that country. A few months later the company also picked up a second Australian subsidiary, Statewide Pest Management. That same year it acquired Virginia's PermaTreat Pest Control Company Inc.

In 2015 Orkin set up a franchise operation in Beijing, China, and acquired Critter Control Inc., a wildlife control operation with franchised branches in 40 states and Canada. The company continued strengthening its position in the Australian pest control market with the 2016 acquisitions of Scientific Pest Management and Murray Pest Control, expanding its reach across the entire continent for the first time. Meanwhile, Rollins purchased Safeguard Pest Control of Kent, England. The following year Rollins acquired the Northwest Exterminating Company of Marietta, Georgia, a firm that served 120,000 customers across five states in the Southeast, making it the company's biggest acquisition since HomeTeam. As with most of the company's acquisitions, Safeguard and Northwest would continue operating more or less independently, under their original names and with their management teams intact.

Rollins's strategy of steady expansion through acquisition served it well during this period, as both revenues and profits grew steadily year after year. At the end of fiscal 2017, the company reported a net income of $179.1 million, derived from revenues of $1.7 billion. The company now had 94 overseas franchises in operation, alongside a rapidly growing list of overseas subsidiaries. New company marketing initiatives included Bed Bug ProAct, an Orkin anti–bed bug service program developed for the hospitality industry. In 2018 the company acquired several more such operations, starting with a triple dip in the British market, where it bought out Kestrel Pest Control Limited, Guardian Pest Control, and AMES Group Limited. The company's international network of franchisees was also growing, with branches in Argentina, Azerbaijan, Brazil, Kenya, and the Netherlands launched during the first few months of the year. Meanwhile, Rollins acquired OPC Services, one of the top pest control companies in Kentucky. During the summer of 2018 the company acquired Singapore's Aardwolf Pestkare (Singapore) Pte Ltd., which became its first company-owned operation in the market.

Roger W. Rouland
Updated, Frederick C. Ingram; Chris Herzog

Orkin, Inc.; Crane Pest Control, Inc.; HomeTeam Pest Defense, LLC; Industrial Fumigant Company; Kinro Investments, Inc.; Northwest Exterminating, LLC; Northwest Exterminating, LLC; PermaTreat Pest Control Company Inc.; Rollins Investment LLC; Rollins Supply, Inc.; Waltham Services LLC; Western Pest Services; Rollins Europe, B.V. Netherlands; Statewide Rollins Pty Ltd.

Diversey, Inc.; Ecolab Inc.; Rentokil Initial plc; The Terminix International Company Limited Partnership.