ANCHOR, MIRRO, BURNES BUYER AN INTRIGUING INDUSTRY OUTSIDER.

ATLANTA-What is Cerberus?

That's the question from much of the housewares industry following Newell Rubbermaid's decision to sell The Burnes Group, Anchor Hocking and Mirro Cookware to Global Home Products, an affiliate of Cerberus Capital Management, for about $310 million last week.

Newell has been looking to shed its underperforming businesses for some time, sources said. But few in the housewares industry have heard of Cerberus, a private investment firm with committed capital of $12 billion.

Cerberus, named after a three-headed dog that guards the gates of hell in Greek mythology, has no other home product companies. But it is known in other areas for acquiring underperforming companies, including Formica, Fila sportswear, and the Alamo and National car rental companies.

Global Home Products is a new entity, formed to run the three Newell companies, and will be based in Columbus, Ohio. The new chief executive officer of Global Home is George Hamilton, who has logged a total of 17 years with Newell, running several different companies. Global Home executives declined to comment.

Eric Bosshard, director of research for Midwest Research, called the deal "a step in the right direction."

"The businesses were underperforming and under pressure, without a resolution in sight," he said. "Newell Rubbermaid [needs] to pursue businesses that would have some success. There are a lot of challenges to this company." In 2003, the three businesses accounted for about $695 million of sales in the Calphalon Home segment.

But the remaining divisions are not out of the woods.

"The remaining portfolio will still have a decline in sales in the first quarter -- of a meaningful amount," Bosshard said. "The Rubbermaid segment is still a real challenge. It's been a woeful performer for the past couple of years. That's what they need to figure out as well."

Regarding Cerberus, Bosshard said, "They clearly think there's some opportunity to get their money back on this acquisition."

Why a non-home goods supplier for a buyer?

"Newell did not discriminate in buyers. These three businesses made no money last year," Bosshard said. "They were break-even companies. It's no surprise that buyers steered clear, considering performance."

"None of this surprised the Street," said Bill Steele, household products analyst at Banc of America, which, he disclosed, does investment banking for Newell. The company has spoken about divesting its frame business in conference calls. It tried to sell Anchor to Libbey a few years ago, Steel said. "It was a buyer's market for these properties."

On the future of Mirro, Steel commented, "The good news is that Mirro is a well-known, low-end brand that needs tweaking." He said he expects Cerberus to invest in the brands, although "typically, equity folks don't spend tons of money behind brands. They're measured in their spending."

"Newell looked at Mirro's line and figured out that it didn't carry a profit margin that they could realize from the volume of business it did," said an industry insider. "It wasn't worth their resources."

Mirro is in the low-end to moderate cookware business, which "is the portion of the business that has gotten hammered by the imports," the insider said.

Burnes, which has several frame brands -- Intercraft, Burnes of Boston, Rarewoods, Carr and Terragrafics -- experienced a steep drop in revenue in recent years, compounded by the company's decision to pull out of Kmart. Lancaster, Ohio-based Anchor Hocking is considered the most attractive of the three companies, thanks to import issues. "You can't ship large quantities of glass in container ships. It doesn't tend to travel well," the observer said.

The resume of George Hamilton reads like a history of the company. Hamilton joined Anchor in August 2002 as a director. In 2001, he had an independent consulting practice. Hamilton was president of several companies within Newell Rubbermaid, including Rubbermaid Europe, Lee Rowan Co. and Anchor Hocking Specialty Glass, from 1996 to 2001. And from 1984 to 1996, Hamilton was vice president and controller at Newell Rubbermaid in a number of companies, both domestic and international, including Anchor, where he held the post from 1990 to 1993.

Following the news of the sale agreement, the company said it changed its segment reporting to reflect discontinued operations. The company is now organized into the following five segments: Cleaning & Organization, Tools & Hardware and Home Fashions, led by James J. Roberts, group chief operating officer; and Office Products and Other, led by Robert. S. Parker, group chief operating officer.