Andvari's Chief Investment Officer, Douglas Ott, recently recorded a new episode of the Preferred Shares podcast on the history of Orkin, the pest control business owned by publicly traded Rollins, Inc. It's an amazing story about a young immigrant from Latvia who started a business selling rat poison door-to-door in 1901 at the age of 14. Otto grew the business through two world wars and a Great Depression and turned Orkin into the largest pest control business in the world by the 1960s. Otto's children would sell Orkin to Rollins in 1964 for $62.4 million in the first-ever leveraged buyout in corporate history.

Although Otto lacked an education, he had an abundance of energy, tenacity, and business savvy. Otto would soon take full advantage of the power of advertising and marketing, but he focused first on creating a great product and a great service. Otto once said, "I wasn't very good at speaking the English language. But when my customers saw what my products could do, it did my speaking for me."

When it was time to expand beyond the rural Pennsylvania farm upon which he grew up, he would choose Richmond, VA, and then Atlanta, GA, to locate Orkin headquarters. He chose both cities for the same reason: both growing and with no established pest control business. Otto instinctively knew to go where there was no competition!

When it came to advertising, Otto started with telephone books, dabbled in radio, and then hit gold with a series of 20-second spots for television in the early 1950s. This was an animated series depicting "Otto the Orkin Man" (a spray gun) doing battle with other characters such as Legs the Roach and Rags the Rat. Each spot would conclude with a victorious Otto singing a jingle to the tune of "Popeye the Sailor Man".

Image via December 16, 1957, Television Age

Young kids were hooked when they saw these ads. They loved the ads so much that parents would use it as a bribe to get them to go to bed. Orkin would also receive hundreds of fan mail every year from children.

More importantly, the ads were extraordinarily effective for adults. The company shared that tests in several of the 300 cities in 26 states where Orkin has offices showed nearly 70% of unsolicited calls were the result of its TV advertising. The ads were instrumental in increasing Orkin's sales to $12.3 million in 1954, a doubling in less than three years.

We heartily recommend listening to the full conversation about Orkin where the hosts go over all the above, and much more. Just follow this link to the Preferred Shares podcast, where you'll also find a transcript, charts, graphics, and links to resources and additional reading.

This image has an empty alt attribute; its file name is 2020-12-09-18_01_25-Window.png


Investment strategies managed by Andvari Associates LLC ("Andvari") may have a position in the securities or assets discussed in this article. At the time of publication of this blog, Andvari clients had a position in Rollins. Andvari may re-evaluate its holdings in any mentioned securities and may buy, sell or cover certain positions without notice.

This document and the information contained herein are for educational and informational purposes only and do not constitute, and should not be construed as, an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This document con