Know When to Fold Them

Mark Control Corp. Bought by Company Before Stock Market Crash
Copyright Forbes Inc. 1987
By Jerry Flint


Talk about timing! "I feel somewhere between terrific and spectacular,' says Gary MacDougal, former chief executive of Mark Controls Corp., headquartered in suburban Chicago. And well he should.

While others took a beating on Black Monday, investors in Mark Controls were rolling in dough. Several weeks earlier MacDougal had finished selling off roughly two-thirds of the firm to a Swiss group for $132 million, or $27.50 a share, plus a new share of stock in the leftover company. That was nearly double the price of the shares on the New York Stock Exchange before the company announced that it was looking for a buyer last May.

"We felt we were living on borrowed time,' MacDougal says. The company could have been an easy target for raiders, and outsiders would have gotten most of the selloff profits. Then he feared a shaky stock market. "That's why we worked over Labor Day weekend, until midnight, to get it done,' MacDougal explains. Had he dallied a few more weeks, the stock market crash would have chopped the prices of those shares.

MacDougal, an ex-McKinsey partner, headed Mark Controls for 18 years of ups and downs. "Once 83% of business was in nuclear power, and it went to zero,' he reminisced. Before the selloff, Mark Controls produced computer-based building management systems that control heat, lighting and security, and industrial valves used in the petroleum and other industries. "Over 18 years the stock went from 10 to 160 {adjusted for splits} and the annual growth rate was 17%,' MacDougal says. "Isn't that how you define the game?'

With $6 million in his own pocket from the selloff, MacDougal can choose his next move with leisure. Does he feel sorry for the Swiss, who bought him out just before the market collapse? "It's still a good deal for them,' he says. "And a deal's a deal. Feeling sorry for the Swiss is not anything that occupies my time.'