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Enter the midtown Manhattan offices of TLC Beatrice International Holdings Inc. these days and the atmosphere is funereal. The corridors of the nation’s largest black-owned food-processing and distribution concern are filled with packed boxes; rows of offices are empty. Absent are the scores of employees scurrying to complete assignments. Gone is the energy, so palpable that it seemed to bounce off the walls, of a company known in its heyday for wheeling and dealing.
These are the final days of TLC Beatrice. Compare them to bringing down the curtain on a Broadway show that has had a series of bravura performances. The house that deal maker par excellence Reginald F. Lewis built had an incredible 12-year run and is currently in the midst of its last act: complete divestiture.
The history of the only be 100s company to break the billion-dollar sales barrier is the stuff of great drama: a man of humble beginnings triumphs against the odds; a company is resurrected after death and financial crisis; and an entrepreneurial model of African American wealth-building thrives. TLC’s tale, as well as black enterprise’s exclusive interview with Loida Nicolas Lewis, the founder’s widow and the company’s savvy, soft-spoken CEO, and her right-hand man, Reynaldo P. Glover, executive vice president and general counsel, offer a rare glimpse into the birth, growth and dismantling of a global business empire. Says Lewis: “Selling the company was the toughest thing that I had to do. I had great reluctance to put the entire company on the block. But I felt that it was now time to complete the work of my late husband.”
Adds Glover, “History will show that Reginald Lewis was able to open the deal, but because of his untimely death, Loida closed it. We left TLC not in a distressed manner but on our own terms. We decided when and how we were going to close this business. We went out on the top of the cycle.”
It all started with the deal.
ACT I: THE ART OF THE DEAL
Today, the story is legend. Twelve years ago, it was a phenomenon. In 1987, through deal-making savvy and iron-willed tenacity, 44-year-old Lewis bagged the proverbial elephant: Beatrice International Foods Cos., a manufacturer of processed meats, dairy products and beverages. The Harvard-trained lawyer had first demonstrated his prowess years earlier by launching an investment firm, the TLC Group, and completing the $22.5 million acquisition of New York-based McCall Pattern Co., a home-sewing products and publishing operation. In trademark fashion, Lewis would flip the then-113-year-old company for $90 million, netting $50 million in profits in the process. (By 1987, TLC Group was No. 6 on the BE Industrial/Service 100 list with revenues of $63 million.)
In purchasing Beatrice, Lewis teamed up with Michael Milken, the legendary junk bond king and senior executive of Drexel Burnham Lambert, the maverick investment bank of the ’80s. Lewis used high-yield debt, or “junk bonds,” to acquire the company in a $985 million leveraged buyout, beating out such powerhouses as Citicorp, Pillsbury and Shearson Lehman