© St. Petersburg Times
published March 6, 2001

By SCOTT BARANCIK

[Photo courtesy of Odyssey Marine Exploration]
A technician conducts sonar operations from the control
room of research vessel Minibex.

ST. PETERSBURG -- What does a recently retired 57-year-old with millions in the bank do to keep busy?

In Jim MacDougald's case, he dabbles in real estate, joins several local charities, builds a waterfront home on St. Petersburg's Snell Isle and takes up golf.

All of which you might expect from the man who co-founded ABR Information Services with his wife, Suzanne, and then made $43-million off the sale of the health insurance processor two years ago.

But last week, MacDougald acquired a 36 percent stake in a more quixotic enterprise: Odyssey Marine Exploration Inc. of Tampa, a deep-sea recovery company that has yet to locate any of its targeted shipwrecks and whose 2000 revenues totaled $250.

Yep, $250.

"Some people lifted eyebrows, like, 'Have you lost your mind?' " said MacDougald, who now is Odyssey's chairman. "It conjures up visions of the Treasure of the Sierra Madre, the old guy with a mule and a beard who sleeps on the ground, expecting every morning that he's going to hit something with his stick and gold's going to come flying out of the hills."

To those who know him well, MacDougald said, his $3-million gamble on Odyssey isn't really that surprising.

In 1982, he quit a secure job with a New York insurance company to start Benefits Control, which later became ABR. "Friends told me I was very dumb," he said.

MacDougald's revolutionary idea: to teach health insurance companies how to use computers to manage their paperwork. The MacDougalds ran the operation out of their New Jersey home, then moved it to the Tampa Bay area in 1987. Ceridian Corp. of Minneapolis bought ABR in 1999 for $750-million.

More recently, MacDougald bought a sailboat manufacturing company that swiftly went belly up. The company's handsome wood boats couldn't compete pricewise with its "Clorox bottle" competitors, he said.

"It was one of my worst ideas," said MacDougald, an Army brat who attended 12 schools before finishing high school and graduated from the University of Maryland with a degree in English. "It cratered in about a year-and-a-half."

MacDougald isn't shy about his primary goal with Odyssey: to make money. "Most people think that we made this investment for the adventure, to go on the boat and play Jacques Cousteau," he said. "But I don't do business for fun. I invested in this because it is potentially extremely successful."

MacDougald likens the shipwreck recovery business to the biotech industry. Both types of companies spend many years and scads of money trying to prove educated hunches. If fortunate, they earn back their investment many times over. Often, they run out of money or patience first.

Odyssey, whose stock closed Monday at 39 cents a share, burns through about $60,000 a month.

Co-founder Greg Stemm said MacDougald's $3-million investment will buy Odyssey the time it needs to complete searches for three ships: the Cambridge, a 17th century British warship thought to have sunk in the Mediterranean with an estimated $200-million to $1-billion in cargo; the Republic, a 19th century American steamship thought to have sunk in the Pacific with a load of gold; and another vessel lost in the Atlantic.

"In this business, if you stay long enough, eventually you're going to find one of the big wrecks," Stemm said.

Odyssey has several things going for it, according to MacDougald. High-tech equipment originally developed to help oil-exploration companies examine underwater rock formations and let telecommunications companies inspect cables is helping Odyssey make wide visual and magnetic sweeps of the ocean floor.

Extensive outreach to archaeologists, governments and potential claimants may help Odyssey avoid the type of costly litigation that has plagued RMS Titanic Inc., a company formerly based in Clearwater that claims exclusive rights to the wreckage of the Titanic, which sank in 1912.

Odyssey's three highest-ranking officers recently agreed to forgive $750,000 of past wages and other debts in exchange for the right to buy 1.25-million shares of restricted common stock. The move not only improved Odyssey's balance sheet but increased its leaders' incentive to succeed.

And MacDougald thinks Odyssey can raise additional money by selling investors a portion of the potential profits from a given ship's recovery. "That's how the oil companies do it," he said.

But then there are the many risks: that Odyssey's research on the three ships' locations will prove faulty. That its equipment will malfunction. That foreign governments or archaeologists will protest the company's handling of recovery projects despite pre-emptive efforts. And, simply, that the money will dry up before the oceans give up their treasures.

If Odyssey does fall short, MacDougald won't lack for things to do.

He serves on the board of directors of six charities, including the Academy Prep Center for Education, a private school for low-income children in St. Petersburg. He has put together a commercial and residential real estate company with former ABR executive Joe Lukason, who supervised the renovation of the former Florida Power Corp. headquarters that became ABR's home.

There's also that new house on Snell Isle to worry about. MacDougald knocked down three expensive waterfront homes to make room for his Shangri-La. He had to hire specialists to move four decades-old oak trees to other parts of the property.

Most intriguing, however, is his possible involvement with Acclaris, a company recently founded by former ABR executive Jim O'Drobinak and his wife, Liana.

MacDougald said there's no guarantee he will invest in or consult for Acclaris, which plans to offer outsourced accounting services to other companies. But perhaps the idea of helping another mom-and-pop operation get off the ground will prove too tempting to refuse.

"It's the same idea (as ABR) but a different niche," he said.

- Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751.