triggered in July 1997. Under the agreement, the French partners have an option to sell their shares after July 1997 and TLC has the option to buy them on the same timetable. “Because of our contractual obligations, we had a mandate to pay particular attention to our French operation. We discovered that it was the right time for a sale,” says Glover.
There were also other reasons the sale appeared attractive now. “There was a French law that limited the size of future stores, the overall consolidation of the country’s food business and the attractive multiples that were being offered for food companies in France,” says Glover. TLC Beatrice’s French food operation sold for 25 times operating earnings, versus an average of 14 for American food companies of similar size.
In the spring, TLC Beatrice, working with its investment bankers, BT Wolfensohn and Banque Paribas, sent out prospectuses to over 30 European companies and received responses from several of them, including Groupe Casino. It took the two companies three to four weeks to structure the deal.
Lewis and her management team are now plotting TLC Beatrice’s future direction. They used a portion of the proceeds from the sale to structure a $175 million cash tender offer for its 11.5% senior secured notes due 2005. “We’ll significantly reduce our costly debt obligations,” says Lewis.
So what does TLC Beatrice look like now? Their current operations include: Tayto Ltd., a snack food company based in Dublin, Ireland; Helados La Menorquina S.A. and Interglas S.A., ice cream manufacturers located in Spain and the Canary Islands; Frisdranken Industries Winters B.V., Sunco N.V., St. Alban Boissons S.A., and Bireley’s, beverage operations located in the Netherlands, Belgium, France and Thailand.
“We have an excellent collection of companies, and we will continue our program of maximizing value and increasing liquidity,” Lewis maintains.
So how does she feel about the possibility of TLC Beatrice losing its No. 1 berth in the near future? “We’ve taken great pride in being the No. 1 on the BE INDUSTRIAL/SERVICE 100 list. But we are not going to let our ranking keep us from selling parts of our business, making acquisitions or doing what needs to be done to enhance shareholder value,” says Lewis. “Our goal has to be focused on wealth creation.”