Sold!

Armed with a $100 million bankroll and a corporate commitment to growth through acquisitions, Terminix International started 1999 just like it finished 1998 … on a buying spree. Only this time, the company needed to look no further than its own back yard, purchasing one of its most highly regarded franchise operations, Terminix, Inc. of Little Rock, Ark., for an unspecified sum in early January.

Owned and operated by the Heflin family for more than 60 years, the $21 million company operates service centers in 33 cities across the state of Arkansas and is the fourth largest franchise in the Terminix family (see chart at right). "I don’t know what they paid for the business," said one industry insider familiar with the Terminix operation, "but it wouldn’t surprise me if they paid one and a half or two times gross sales. Premium prices are being paid for quality companies."

"We’re really proud to have been able to purchase this particular franchise," said Norm Goldenberg, vice-president of government/public affairs, licensee relations and technical services for Terminix. "The Heflin family has developed outstanding management skills that have resulted in great market penetration throughout the state of Arkansas."

"One component of our current strategy involves acquiring exceptional, quality companies to augment our strong internal growth," added Albert Cantu, president of Terminix, based in Memphis, Tenn. "This acquisition certainly fulfills our goal. We have great respect for the innumerable contributions the Heflins have made throughout the years to the pest control industry, to the Arkansas community and to the Terminix organization, and we feel fortunate to merge their team with ours."

The franchise was started by Jay Heflin and is currently run by his son Johnny Heflin, who is president and CEO. Several years ago the franchise was divided into two territories so that Johnny Heflin’s two sons — Jay and Marc — could share ownership by running separate divisions.

"I have mixed emotions because I have invested my entire life in this industry," Johnny Heflin said. "However, I have great confidence that Terminix International will do a great job in protecting the health and property of the Arkansas people that we have had the privilege to serve. In addition, our employees will now have opportunities for personal growth and career advancement throughout the Terminix system which they would not have had with us."

The Heflins will continue to work in a family business located in their current headquarters. They are involved in a variety of property management and investment ventures, and they will remain owners of a Terminix Hot Springs Village franchise in order to stay involved in the structural pest control in-dustry.

The Heflin purchase is the latest acquisition in a buying spree that has spanned more than two years for Terminix, resulting in the purchase of more than 100 pest control companies throughout the United States and Europe. During that time, Terminix has grown from $700 million in sales to nearly $1 billion worldwide, becoming the industry’s largest supplier of pest control services.

Are any more purchases on the horizon for the company? "I get calls every day from pest control operators who are interested in selling their businesses to us," Goldenberg said, "and we have the manpower and resources to make it hap-pen."

However, David Nimocks III, president of Terminix Service, Fayetteville, N.C., said he would be "very surprised" if any of the other major franchisees sold out, "but it’s nice to know you have a ready and willing buyer if you’re ever interested in selling."