Reginald Lewis
Encyclopedia
Reginald F. Lewis was an American
businessman, who was one of the most successful business leaders during the 1980s. He was the richest African-American man in the 1980s. Born in Baltimore, Maryland, he grew up in a middle class neighborhood. He won a football scholarship to Virginia State College, graduating with a degree in economics in 1965. He graduated from Harvard Law School
in 1968 and was a member of Kappa Alpha Psi
.
In 1992, Forbes
listed Lewis among the 400 richest Americans, with a net worth
estimated at $400 million. He also was the first African American to build a billion dollar company, Beatrice Foods
.
firm, in 1983.
His first major deal was the purchase of the McCall Pattern Company, a home sewing pattern business for $22.5 million. Lewis learned from a Fortune magazine
article that one of the Norton Simon companies that Esmark planned to divest was McCall Pattern Company, a maker of home sewing patterns founded in 1870. With fewer and fewer people sewing at home, McCall was seemingly on the decline—though it had posted profits of $6 million in 1983 on sales of $51.9 million. At the time, McCall was number two in its industry, holding 29.7 percent of the market, compared to industry leader Simplicity Pattern
s with 39.4 percent.
He managed to negotiate the price down and then raised $1 million dollars himself from family and friends and borrowed the rest from institutional investors and investment banking firm First Boston
Corp.
Within one year, he turned the company around by freeing up capital tied in fixed assets such as building and machinery, finding a new use for machinery during downtime by manufacturing greeting cards, and he then started to recruit managers from rival companies. He further strengthened McCall by containing costs, improving quality, beginning to export to China, and emphasizing new product introductions. This new combination led to the company's most profitable year in its history. With the addition of McCall real estate worth an estimated $6 million that the company retained ownership of, he later sold McCall at a 90-1 return, resulting in a tremendous profit for investors. Lewis's share was 81.7 percent of the $90 million.
In 1987, Lewis bought Beatrice International Foods
from Beatrice Companies for $985 million, renaming it TLC Beatrice International, a snack food, beverage, and grocery store conglomerate that was the largest African-American owned and managed business in the U.S. The deal was partly financed through Mike Milken of the maverick investment bank Drexel Burnham Lambert
. In order to reduce the amount needed to finance the LBO, Lewis came up with a plan to sell off some of the division's assets simultaneous with the takeover.
When TLC Beatrice reported revenue of $1.8 billion in 1987, it became the first black-owned company to have more than $1 billion in annual sales. At its peak in 1996, TLC Beatrice International Holdings Inc. had sales of $2.2 billion and was number 512 on Fortune magazine's list of 1,000 largest companies.
. He died at age 50, from brain cancer. Nicolas-Lewis took over the company a year after his death.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
businessman, who was one of the most successful business leaders during the 1980s. He was the richest African-American man in the 1980s. Born in Baltimore, Maryland, he grew up in a middle class neighborhood. He won a football scholarship to Virginia State College, graduating with a degree in economics in 1965. He graduated from Harvard Law School
Harvard Law School
Harvard Law School is one of the professional graduate schools of Harvard University. Located in Cambridge, Massachusetts, it is the oldest continually-operating law school in the United States and is home to the largest academic law library in the world. The school is routinely ranked by the U.S...
in 1968 and was a member of Kappa Alpha Psi
Kappa Alpha Psi
Kappa Alpha Psi is a collegiate Greek-letter fraternity with a predominantly African American membership. Since the fraternity's founding on January 5, 1911 at Indiana University Bloomington, the fraternity has never limited membership based on color, creed or national origin...
.
In 1992, Forbes
Forbes
Forbes is an American publishing and media company. Its flagship publication, the Forbes magazine, is published biweekly. Its primary competitors in the national business magazine category are Fortune, which is also published biweekly, and Business Week...
listed Lewis among the 400 richest Americans, with a net worth
Net worth
In business, net worth is the total assets minus total outside liabilities of an individual or a company. For a company, this is called shareholders' preference and may be referred to as book value. Net worth is stated as at a particular year in time...
estimated at $400 million. He also was the first African American to build a billion dollar company, Beatrice Foods
Beatrice Foods
Beatrice Foods Company was a major American food processing company. In 1987, its smaller international food operations were sold to Reginald Lewis, a corporate attorney creating TLC Beatrice International, after which the majority of its domestic brands and assets were acquired by Kohlberg,...
.
Business career
Recruited to top New York law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP immediately after law school, Lewis left to start his own firm two years later. After 15 years as a corporate lawyer with his own practice, Lewis moved to the other side of the table by creating TLC Group L.P., a venture capitalVenture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
firm, in 1983.
His first major deal was the purchase of the McCall Pattern Company, a home sewing pattern business for $22.5 million. Lewis learned from a Fortune magazine
Fortune (magazine)
Fortune is a global business magazine published by Time Inc. Founded by Henry Luce in 1930, the publishing business, consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time Warner was the world's largest...
article that one of the Norton Simon companies that Esmark planned to divest was McCall Pattern Company, a maker of home sewing patterns founded in 1870. With fewer and fewer people sewing at home, McCall was seemingly on the decline—though it had posted profits of $6 million in 1983 on sales of $51.9 million. At the time, McCall was number two in its industry, holding 29.7 percent of the market, compared to industry leader Simplicity Pattern
Simplicity Pattern
The Simplicity Pattern Company is a manufacturer of sewing pattern guides, under the "Simplicity Pattern," "It's So Easy" and "New Look" brands. The company, now owned by Wrights, began in 1927 in New York City. During the Great Depression, Simplicity allowed home seamstresses to create...
s with 39.4 percent.
He managed to negotiate the price down and then raised $1 million dollars himself from family and friends and borrowed the rest from institutional investors and investment banking firm First Boston
First Boston
First Boston Corporation was a New York-based, bulge bracket, investment bank, founded in 1932 and acquired by Credit Suisse in 1990. Together with its sister investment banks, it was referred to as CS First Boston after 1993 and part of Credit Suisse First Boston after 1996, the First Boston part...
Corp.
Within one year, he turned the company around by freeing up capital tied in fixed assets such as building and machinery, finding a new use for machinery during downtime by manufacturing greeting cards, and he then started to recruit managers from rival companies. He further strengthened McCall by containing costs, improving quality, beginning to export to China, and emphasizing new product introductions. This new combination led to the company's most profitable year in its history. With the addition of McCall real estate worth an estimated $6 million that the company retained ownership of, he later sold McCall at a 90-1 return, resulting in a tremendous profit for investors. Lewis's share was 81.7 percent of the $90 million.
In 1987, Lewis bought Beatrice International Foods
Beatrice Foods
Beatrice Foods Company was a major American food processing company. In 1987, its smaller international food operations were sold to Reginald Lewis, a corporate attorney creating TLC Beatrice International, after which the majority of its domestic brands and assets were acquired by Kohlberg,...
from Beatrice Companies for $985 million, renaming it TLC Beatrice International, a snack food, beverage, and grocery store conglomerate that was the largest African-American owned and managed business in the U.S. The deal was partly financed through Mike Milken of the maverick investment bank Drexel Burnham Lambert
Drexel Burnham Lambert
Drexel Burnham Lambert was a major Wall Street investment banking firm, which first rose to prominence and then was forced into bankruptcy in February 1990 by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken. At its height, it was the...
. In order to reduce the amount needed to finance the LBO, Lewis came up with a plan to sell off some of the division's assets simultaneous with the takeover.
When TLC Beatrice reported revenue of $1.8 billion in 1987, it became the first black-owned company to have more than $1 billion in annual sales. At its peak in 1996, TLC Beatrice International Holdings Inc. had sales of $2.2 billion and was number 512 on Fortune magazine's list of 1,000 largest companies.
Personal life
Reginald Lewis was married to Loida Nicolas-LewisLoida Nicolas-Lewis
Loida Nicolas Lewis is a Filipino-born, New York-based industrialist, philanthropist, civic leader, motivational speaker, author, and lawyer.- Business interests :...
. He died at age 50, from brain cancer. Nicolas-Lewis took over the company a year after his death.
External links
- Reginald F. Lewis Official Website
- Reginald F. Lewis Museum of African American Culture & History
- Reginal F. Lewis Fellowship - Harvard
- The Lewis College
- Reginald F. Lewis High School - Baltimore
- Reginald F. Lewis Fan Club
Articles
- Reg Lewis, TLC Beatrice international
- Often Said
- Afrocentricnews - TLC Beatrice to Liquidate
- http://www.vsu.edu/students/organization/kapsi/alphaphi.htm
- http://www.fundinguniverse.com/company-histories/TLC-Beatrice-International-Holdings-Inc-Company-History.html