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Atlanta icon built by Orkin, Rollins

Otto Orkin's story, and that of the company he founded, is the stuff of business mythology. Humble beginnings, innovation, great success, a little backstabbing -- and 40 years ago almost to the day, a deal whose inventiveness so captured the imagination of Wall Street that it became the financial foundation of the giant mergers of the last few decades.

Orkin's Latvian parents came to America in 1891, when Otto was 5. He began mixing arsenic-based poisons to kill rats on the family's Pennsylvania farm. When he was 14, he borrowed 50 cents from his father to buy chemicals and "the Rat Man," as he was derisively known, began his business.

But he loved the moniker. Based in Richmond, Va., the company grew and was dubbed Otto Orkin and the Rat Man Co. Visiting Atlanta in 1926 -- so the Orkin lore goes -- Otto looked at the phone book and found no listings for pest control companies. He opened a branch in the city, and eventually moved his company here.

To lure customers, Orkin would set up displays of vermin in his storefront windows, with the message to passers-by that their homes could be under similar attack -- unless they called the Rat Man. Orkin would peek around the building's corner to see the public's reaction to his offbeat marketing.

Orkin Exterminating Co., as the company became known during the Depression, pioneered much of modern pest control. Otto Orkin had noticed that customers often didn't use his poisons correctly, so he saw an opportunity to provide a home and business service, as well as a product -- pest poison and application rolled into one. Thus was born the "Orkin Man," first as a cartoon character in breakthrough 1950s TV commercials, later as the brawny soldier waging war on hordes of pests.

Fanatic about service, Orkin personally would call each customer who canceled and attempt to determine the reason.

Orkin's service wasn't cheap, but it was effective. Having an Orkin truck parked at a home was a sign of prestige -- the homeowners could afford the best.

By 1961, Orkin had lost control of the company to his children and in-laws after they'd had him declared incompetent. He wasn't -- and convinced a judge -- but Otto Orkin never regained the reins of the pest control company.

His family took the company public, and the Orkin clan figured their 85 percent was worth about $60 million -- not bad for an enterprise that had begun with a half-dollar investment.

Enter another entrepreneurial legend, O. Wayne Rollins. Born in 1912 in the hardscrabble northwest Georgia farming town of Smith Chapel, near Ringgold, Rollins survived his youth and the Depression by working 70-hour weeks in textile mills. In 1948, he and brother John conceived what would later be called "synergy." Wayne began to buy radio stations that advertised car dealerships owned by John.

In 1960, Wayne owned six radio and three TV stations, and he took Rollins Broadcasting public on the American Stock Exchange with the symbol ROL. Today, the same listing can be found on the New York Stock Exchange.

Wayne Rollins died in 1991 worth about $1 billion. The family's generosity can be seen in the tens of millions of dollars donated to Emory University, where buildings are named after both Wayne and his wife, Grace. Zoo Atlanta, where Orkin sponsors a sleepover children's exhibit, and a bug museum at the Smithsonian Institution are other family favorites.

The nature of Rollins Inc. changed dramatically in 1964. Two Wall Street insiders, Lewis Cullman and Herb Weiner, engineered the first of what in the 1980s would become known as the "leveraged buyout," or LBO. The target was Orkin, whose annual revenues were about $37 million, and the disproportionate buyer was Rollins Broadcasting, which garnered about $9 million a year. The date of the sale was Sept. 1, 1964.

The $62.4 million deal was risky, considering that a small company was gobbling up a much larger one with the aid of massive debt. But it worked.

Still, as the negotiations were underway, Cullman presciently predicted the litigation troubles decades down the road. In private memoirs, he recounted that he told his partners: "'We're going to buy Orkin for $26 a share, but that's just to set the price. We don't want the stock. We're buying the assets.'

"The point was important," Cullman wrote. "Liability conveys with the stock even back in those less litigious times. We wanted nothing to do with that. Orkin, after all, dealt in poisons."

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