Tech Dealmaker Awards

Doble

By James Connolly, Associate Editor

It was not your ordinary company. It was not your ordinary deal — and not just because it took 40 years to close.

The legacy of Frank Currier Doble was punctuated by the sale of the company that bears his name, Doble Engineering Co. of Watertown, to ESCO Technologies Inc. of St. Louis, almost four decades after his death. For those many years the Doble company was controlled by a pair of trusts that the founder established to benefit Tufts University, his alma mater, and Lesley University, where he served as a trustee.

It’s a pretty good bet that Doble never envisioned what his gift would be worth. ESCO paid $318.5 million for Doble Engineering in November 2007. That left the universities to split $272 million.

The $136 million that Lesley received not only represented the Cambridge school’s largest ever gift, it roughly tripled the school’s endowment, according to university president Joseph B. Moore. He said the funds will be used to invest in academic programs, enhance student scholarships, expand and improve core facilities. At Tufts, its largest-ever gift is helping to pay for a new science laboratory.

If you aren’t involved in maintaining the worldwide electric power grid, you probably haven’t crossed paths with Doble Engineering.

Frank Doble founded his company in 1920, when utilities were still wiring much of the U.S. and Canada for electric power.

“A lot of people thought he was eccentric because he was so focused on the company,” says Boston attorney Edward M. Condit, who was a trustee and outside director for Doble Engineering. “He was a tremendous talent who was devoted to his employees and serving the electric power industry. When he started the company, electric power was still in its infancy.”

Doble Engineering’s role in the establishment of the North American power grid centered on testing and maintenance. The company tested equipment, including circuit breakers and transformers, carrying out tasks such as ensuring that the oil used in insulation for transformers didn’t break down during years of use. The testing, and the knowledge base that the company built up, translated into reliability and safety throughout the power grid. Condit notes that “Doble Tested” carried an air of authority.

The company didn’t just sell equipment or services. In some ways, it used the classic business model that IBM followed for many years, renting rather than selling equipment to develop annuity revenue, and supplementing that with consulting services, according to Howard Nichols, who joined the Doble board in 1969, representing the former Bank of Boston-owned Old Colony Trust Co.

At times a conservative company, Doble Engineering was ahead of its time in one way — enabling collaboration. It hosts customer conferences at which engineers from utilities around the world share information about maintenance problems and solutions. “One of the things that made Doble great was that before it became popular to say you were a partner with a client, even back in the 1930s, they weren’t just clients, they weren’t just purchasers of equipment” Nichols said.

The trust helped manage the company through growth years, but Condit and Nichols credit current CEO Robert Smith, hired in 2000, with leading it to where it could return the $272 million to the universities.

When Smith joined in 2000, the company that had been run by trust since the 1960s was, as they say, stuck in the ’60s. The company wasn’t computerized, the phone system was outdated, and it could take days to answer a customer query, Smith said.

Smith brought in new technology and new approaches, including moves into new markets around the world. When Smith took over, the company recorded $34 million in revenue and now is in the $85 million range.

In recent years, the universities urged the trustees to sell so the schools could receive their donations. In 2007, the trustees gave in. “I think we accomplished something in turning it from something that would have sold for $100 million a few years ago into something that sold for more than $300 million. When we first got it, it wouldn’t have sold for $500,000,” Nichols said.

jconnolly@masshightech.com | 1-617-241-4338

Category

Philanthropy

Details

Seller: Doble Engineering Co.
Buyer: ESCO Technologies Inc.
Value: $318.5 million
Location: Watertown
Advisers to Doble: The Bigelow Co. LLC (financial), Goodwin Procter LLP (legal)
Advisers to ESCO: Stephens Inc. (financial), Bryan Cave LLP (legal)
Key executive: Robert Smith, president and CEO, Doble Engineering

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