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Black business loses a star: Lewis dies of cancer at 50.

Reginald F. Lewis, the Wall Street financier, lawyer and philanthropist who rose to head the nation's largest black-owned business, died in January of a cerebral hemorrhage after suffering from brain cancer. The untimely death of Lewis, 50, robs the black business community of one of its brightest stars. It also leaves the future of his company--TLC Beatrice International Holdings Inc.--in question.

Lewis is remembered as a brilliant and hard-nosed deal-maker with a penchant for privacy, shielding his family from media attention even as he became one of the most prominent business leaders of his generation. He is also remembered as a man who wanted to be judged by performance, refusing to accept race as either a crutch or a barrier to his success. "I don't want to pay 5% more on a deal because we're going to be the first Americans of African descent to do it," Lewis told BLACK ENTERPRISE in an exclusive interview after acquiring TLC Beatrice in 1987. "If our work is perceived as an indication that [we] can function in a global, competitive situation, that's nice. But I've always believed that anyway."

After graduating from Harvard Law School in 1968, Lewis spent two years at the New York law firm of Paul Weiss Rifkin Wharton & Garrison. In 1973, he went on to establish his own corporate law practice, Lewis & Clarkson, specializing in venture capital. A desire to "do the deals myself" led to Lewis starting the TLC Group L.P. in 1983, so that he could concentrate on buying and selling companies. His first major deal was the $22.5 million leveraged buyout (LBO) of the New York-based McCall Pattern Co. sewing concern in 1983. Lewis orchestrated four years of cost-cutting measures that nursed the struggling company back to health. By 1987, TLC Group was No. 6 on BE 100 list with revenues of $63 million. That summer, he sold McCall for $90 million, netting $50 million in profits for himself.

While the rest of American business was still buzzing over the sale of McCall, Lewis had already chosen a larger target: the Beatrice International Food Cos., an ice cream, snack and food distribution company with holdings in 31 countries. By October of 1987, he was able to complete an LBO of the company for $985 million. The deal, the largest LBO ever of overseas assets by an American company, was a landmark for American business. TLC Beatrice is the first and only black-owned company to break the $1 billion revenues barrier. In 1988, TLC Beatrice was named BE Company of the Year, when it became only the third company to claim the No. 1 position on the BE INDUSTRIAL/SERVICE 100 list, a position it has yet to relinquish.

Market analysts say that Lewis' strategy of eliminating LBO debt by selling off the least profitable of TLC Beatrice's original 64 subsidiaries in Australia, Asia and Latin America, has given the company a solid balance sheet In 1989, Lewis tried to erase the company's remaining $139 million in long-term debt by raising an estimated $194 million through an initial public offering of 35% of TLC Beatrice's stock. The offering failed because of skepticism over a volatile stock market and concerns that Lewis and other company insiders would profit disproportionately from the deal. Now made up of operations in Western Europe anchored by wholesale and retail food companies around Paris, TLC Beatrice's net worth was recently estimated at more an $500 million. The Lewis family owns about 55% of the company.

Prior to his death, Lewis managed to arrange an orderly transition of power. On Jan. 18, a new "office of the chairman" was formed. Lewis' half-brother, Jean S. Fugett Jr., 41, was appointed vice chairman and will assume responsibility for running the company. Albert M. Fenster, 40, executive vice president for finance and legal affairs, and Dennis P. Jones, 41, executive vice president for operations, will assist Fugett.

Still, there was uneasiness with TLC Beatrice's new leadership at press time. Even though Fugett is a lawyer who has served on the TLC Beatrice board of directors since 1987 and worked closely with Lewis in troubleshooting and legal matters, analysts speculate that the company would be sold unless someone from the outside was brought in to run it. The company was also rumored to be a take-over target, because TLC Beatrice has about 10 million shares outstanding. Through a spokesperson, Fugett denies the company is for sale. He maintains that TLC Beatrice is in good hands: "Our goal will continue to be to maximize returns from each of our business units, consistent with what's best over the long term."

While the company had yet to report 1992 sales at press time, TLC Beatrice expected a modest decrease from its $1.5 billion in revenues for 1991, due largely to the European recession.

Lewis, who amassed a fortune estimated at $400 million, was also well-known for his philanthropy. Last July, he gave a $3 million grant to Harvard Law School. The gift the largest in Harvard's 175-year history, was used to establish the Reginald F. Lewis International Law Center, the first building at the school named after an African-American. Lewis also contributed $1 million to Howard University and gave other sizable gifts to Virginia State University, where Lewis earned his undergraduate degree in economics, and Kappa Alpha Psi Fraternity, of which he is a member. "His death is a loss for the entire nation, but it is a major loss for African-American people," says Howard University President Franklyn Jenifer. "Reginald Lewis represented the best of all we talk and dream about."
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Title Annotation:Reginald F. Lewis
Author:Scott, Matthew S.
Publication:Black Enterprise
Article Type:Obituary
Date:Mar 1, 1993
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