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Investment Firm Buys Beatrice Food Unit

August 10, 1987

NEW YORK (AP) _ The TLC Group, a New York investment firm, has agreed to buy the Beatrice International Food Co. for $985 million, officials of the investment firm said Sunday.

TLC will own 55 percent of the business, making it the largest black-owned company in the country in terms of annual revenue.

The Chicago-based food unit includes 64 companies in 31 countries. It reported $2.5 billion in sales last year and operating income of $147 million.

The international food company makes candy, snacks, processed meats, beverages and other food products and is engaged in wholesale and retail distribution of food, groceries and household products.

In the deal with BCI Holdings, the parent of Beatrice companies, Drexel Burnham Lambert Inc. will own most of the balance. Drexel is providing financing for the leveraged buyout.

In a leveraged buyout, a company’s cash flow is used to repay the debt taken on to finance the purchase.

The New York Times, citing unnamed sources, reported in Monday’s editions that the management of Beatrice’s international food business would have a small stake in the new company.

The TLC Group was formed by chairman Reginald F. Lewis as a concern that would acquire other companies. It bought McCall Pattern Co. for $1 million in 1984 and sold it last month for $90 million to the John Crowther Group, a British textile conglomerate.

The Johnson Publishing Co. of Chicago is currently the largest black-owned business, with revenues last year of $173.5 million.

TLC Group said it had agreed to sell the company’s Beatrice Foods Canada Ltd. for about $230 million, in a leveraged buyout by the Onex Corp. of Canada and the management of Beatrice Canada. TLC will keep a 20 percent interest.

The sale, which is expected to be completed by Oct. 1, is subject to approval by the Justice Department, the Federal Trade Commission and some foreign governments in countries where the company operates.

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