CPP's
Acquisition of Pinkerton's
Wathen
wanted to buy Pinkerton's for several reasons. First, he had always had the
goal of creating the largest firm in the security guard industry and the
acquisition of Pinkerton's would put him in a virtual tie with Baker
Industries, a subsidiary of Borg Warner, and the largest provider of contract
guard services. Secondly, Wathen had been convinced for some time that American
Brands was mismanaging Pinkerton's and destroying a great brand name with its pricing
strategy. In October 1987, American Brands announced it had decided to sell
Pinkerton's because the security guard firm no longer fit into Brands'
long-range business strategy. Upon this announcement, Jerry Brown, CPP's
secretary and general counsel, recalls, "Tom [Wathen] called me in and
from that moment I knew he was going to do whatever it took to buy Pinkerton's.
Tom was always hung up on being the largest, and on Pinkerton's
name."Morgan Stanley, an investment bank, was to represent American Brands
in the sale and the bidding promised to be hotly contested. A task force of
senior managers was quickly formed to prepare CPP's bid which they knew, given
the time pressures of the sale, would not have the benefit of adequate
preparation...
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