By Alan Prendergast
By Michael Roberts
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Like the waste business and the video business, the security business is based on the repetition of services, and this was another chance for Huizenga to be number one.
The courtship lasted from November 1995 through the following February, when Jackson sold DBA to Republic. In a stock-swap deal estimated at about $82 million, Republic acquired DBA and two other companies. Jackson won't reveal how much the DBA portion of the deal was worth. He says Huizenga recognized DBA as a proven winner and promised no changes. Jackson would stay on as CEO. Republic's deep pockets would enable DBA to offer free installation of its security systems. Jackson thought he had a great deal on his hands.
Patrick Egan, who ran his own security company for a number of years in Pennsylvania and sold to Republic in January 1997, says that an offer such as Huizenga's was just what the medium-sized independents were looking for. "We were waiting for someone to consolidate the independents. Entrepreneurs like Stew and myself saw an opportunity."
Still, Jackson's move caught some in the industry off-guard. "I was personally surprised," says Bob Bonifas, who runs one of the largest remaining independent security companies out of Aurora, Illinois.
For several months business remained strong. Huzienga ordered Jackson to equip his whole service fleet with new trucks.
The happy feelings didn't last, however. Still going after number one, Republic tried to "create a friendly deal with ADT," Kessler says. But when the proposed deal was announced, Republic stock plunged. Investors were nervous about Republic making such a huge commitment when industry growth percentages were "slow potatoes" compared to the auto retail business, which Republic was also attempting to consolidate. (In the past year, Republic has bought out three of the area's largest auto dealerships: the Emich Group, the Chesrown Group and John Elway's six dealerships.)
"The size of the amount of stock they were going to have to issue made the stock quite volatile," Kessler says. "It spooked the chairman of ADT." The deal fell through in September 1996. "To some people, the writing was on the wall," he says. "If Republic couldn't get ADT, they were left in the number-four position. Fourth place wasn't worth it to Huizenga."
"When [Huizenga] found out he wasn't going to be number one, he sold it to Ameritech," echoes Pettit. Ameritech's security division, SecurityLink, purchased Republic's alarm-company assets in October 1997.
Jackson says he was out of town when he got a call from Bob Guerin, president of Republic's securities division. "He said, 'There'll be a conference call. They sold all the assets to Ameritech.' I didn't know who Ameritech was," Jackson says.
But he knew he was on the outs, a fact confirmed when Ameritech officials arrived at DBA headquarters soon after. Jackson says he invited them out for lunch but was rebuffed. It was Friday, and they wanted him out by Monday.
"I think the sale with Republic, he was gonna get the best of both worlds," Pettit says of Jackson. "He got money, got the CEO position--how good can it get? When they sold to Ameritech, he was devastated and betrayed, then pissed."
Stan Schwab, who'd been Jackson's close colleague in the mid-Eighties, had been against the deal from the beginning.
"I think Stew was in a time of his life when he had a lot of things coming at him, inside and outside," says Schwab, who is now SecurityLink's regional manager. "I think in all honesty, Huizenga has a lot of flair to him, a reputation as a superstar. I think Stew was a little mesmerized by the attention."
"Of all the people I know, I'm the last one to be star-struck," Jackson responds. "I've been around stars. But Huizenga's word is like platinum on Wall Street. He's a winner."
Jackson denies any personal or professional troubles, describing the years of the acquisition as "one of the calmer, better times in my life."
But his family was surprised when Jackson sold the company to Huizenga. "I really thought it would never happen, because it's been in our family so long," says Jackson's daughter Mandy. "We all took it personally. I don't know how my grandmother would feel about it."
"I'm absolutely baffled. It's beyond my wildest imagination that [Ameritech would] tear the guts out of the company," Jackson says. Ameritech fired DBA's top 100 people, he says. "The morale declined instantly. Service declined instantly."
"Ameritech customers are jumping off like rats off a ship," Bonifas adds.
Kessler says the company's troubles are common for any consolidation effort. "Whenever you have a small mom-and-pop business and you throw it open to a national company, service is going to initially suffer. That doesn't mean it will last forever, but there is a shaking-out period. There's no guarantee Ameritech will succeed, but there's no guarantee they will fail, either."
SecurityLink officials say the company is doing well, and according to a recent list of the top 100 security firms, published by Security Dealer Magazine, SecurityLink finished number two, with 1,100,000 subscribers and gross revenues of $450 million in 1997.
For all his vitriol against Ameritech, Jackson acknowledges his own role in what has happened to his family's business. "I feel great responsibility to that in many dimensions," Jackson says. "I'm trying not to mitigate it, but I want to give customers another choice."