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Reginald Lewis

Reginald Lewis

Reginald F. Lewis (December 7, 1942 – January 19, 1993), 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 1980's. Born in Baltimore, Maryland, he grew up in a middle class neighborhood. He won a football scholarship to Virginia State College (now Virginia State University), graduating with a degree in economics in 1965. He graduated from Harvard Law School in 1968. He was also a member of Kappa Alpha Psi.

In 1992, Forbes magazine 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.

He died, aged 50, from brain cancer.

Business

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 capital 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 Patterns 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. By containing costs, improving quality, beginning to export to China, emphasizing new product introductions. This 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 they retained ownership of, he later sold the company at a trememdous profit for investors a 90-1 return. 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.

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