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Few African Americans have taken part in leveraged buyouts. Following in the footsteps of the late Reginald Lewis, with his $985 million acquisition of TLC Beatrice in 1987, Dumas M. SimÃ©us joined the club in 1996, creating SimÃ©us Foods International (No. 11 on the be industrial/ service 100 list). And in April, Chester C. Davenport’s Georgetown Partners jumped into the mix with a wireless telephone pact with GTE, allowing him to participate in SBC Communication’s pending $62 billion acquisition of Ameritech Corp. (see “The Big Comeback,” Newspoints, this page).
The newest deal maker is Robert M. Beavers Jr. The 55-year-old most recently served as a senior vice president, senior management liaison and member of the board of directors of McDonald’s Corp. But this fall Beavers retires from the world’s largest fast-food retailer to join a group of investors buying Fresh Start Bakeries of Brea, California.
Fresh Start’s 15 regional baking facilities supply buns to approximately 54% of McDonald’s restaurants in Latin America, 24% of the golden arches in Europe and 18% of the McDonald’s in the U.S. Fresh Start is one of the chain’s original suppliers and has fed the McDonald’s system for 32 years. An estimated 98% of the company’s revenues come from McDonald’s. Baking and Snack, a trade publication that follows industry trends, reported that Fresh Start Bakeries’ annual sales were approximately $110 million last year.
During his 35-year career at McDonald’s, Beavers rose from a $1 per hour part-time crew member to the first African American to hold several key company positions. He was identified early on by black enterprise as a man on the go. Beavers was largely responsible for ushering in many of McDonald’s first black franchisees. He earned a seat on the Oak Brook, Illinois, corporation’s board in 1984, when he was one of only a handful of minority Fortune 500 upper-level executives. As McDonald’s first black senior vice president and zone manager, Beavers was responsible for 1,800-plus U.S. restaurants that generated annual sales exceeding $2 billion. Before participating in the Fresh Start buyout, he had to resign his McDonald’s positions to avoid a conflict of interest.
“There is strong interest on the part of McDonald’s to grow its minority suppliers,” says Beavers, “and I think that as a [former] senior executive and director of the company, I’ll be able to use my knowledge of the McDonald’s system, the relationships that I have with the franchisees and with the company, to grow our business.”
Fresh Start Bakeries was acquired in 1994 by Campbell’s Soup Co., which helped fund its international expansion. However, Dale Morrison, Campbell’s new CEO, wanted to concentrate on the soup business and put Fresh Start on the block.
When Beavers learned last year that Fresh Start was available, he headed a group seeking to acquire it. Other groups were also interested, including Boston-based Berkshire Partners. A manager of $1.6 billion in equity capital, Berkshire has worked with institutional investors for over 15 years. Beavers had the inside track at Oak Brook and Berkshire had lots of