By Dwayne Williams
Most people don't know the Reginald Lewis Story. And those few that do usually focus on how rich he was. In 1992, a year before his death, he was the 246th richest person in America, according to Forbes Magazine.
His real legacy, in my opinion, is that anything is possible if you put your mind to your goals and truly commit yourself to achieving them with action.
As you will see in the paragraphs ahead, he used creativity, moxie and grit to blow past all expectations considering where he started from. Personally, he is one of my all time favourite heroes. I've read 3 books on this man. And he was absolutely magnificent throughout his whole life. There's a lot to cover. So let's get on with it.
Reginald really became Reginald Lewis in high school. He was star quarterback of the school's football team with a winning record. When he graduated, he earned a football scholarship to Virginia State University, a historically black college in Richmond, Virginia. Where he continued his winning ways. But as fate would have it, he hurt his knee, permanently sidelining his career and ending his scholarship. Depressed. He sulked around for a while before rededicating himself to his studies. Eventually, he shot up to the top of his class academically.
Near the end of his senior year in college, his counsellor informed him of a new 3 month program that Harvard University had for black students to take classes over the summer. The aim of this program was to help them gain experience at a ivy league school and use it to apply to graduate schools. He readily accepted.
He and other top students from black colleges across the nation spent the summer as quasi students of Harvard University. Reginald loved everything about the most prestigious school in the world.
As the program was ending in late August, he confided to a few of his classmates that he was going to Harvard in the fall. They thought he was crazy. Somehow, someway he was determined to get into Harvard Law School. So as his fellow classmates were leaving, he stayed behind and signed up for law school classes along with the incoming regular students that fall.
Reginald was attending classes for a couple of months before Harvard Admissions Department finally caught up with him. A meeting was scheduled. He had a lot of explaining to do. "Why are you still here?" and "Why should we let you stay?" All involved said that he was well prepared for those questions. Opposition melted as he gave very detailed reasons why he belonged at Harvard University. By the end of this meeting, he was invited to stay on by an all white admission committee.
As a result of Reginald Lewis's actions in the fall of 1966, he is the ONLY student in Harvard Law School entire 200 year history, to be accepted into the college WITHOUT filling out an application.
Later when he became a massive success in the business world, he donated $5 million dollars to this law school (the largest single donation at the time). After his death, they named the law school after him - The Reginald F. Lewis International Law Center. He also has a museum dedicated to his life and career at Virginia State University, which he gave a million dollars to.
After graduating, Reginald started working for a small boutique law firm, went on blind date with a visiting law school graduate touring the US, Loida Nicolas, from the Philippines. They later married, had two kids and settled into upper middle class life in New York City. But Reginald soon became bored working adminstratively on business deals for 15 years. He wanted in on the action.
Eventually, he found what he was looking for with McCall Pattern Company (early competitor to JoAnn Fabrics). A distress firm whose owners were desperately trying to sell this nationwide chain of fabric stores for $20 million dollars. Reginald had extensive knowledge on how to finance the purchase of this company. But there was only one problem. He needed put down a million dollars of his own money as collateral. Money he didn't have. So he borrowed anything he could get from friends and family, and borrowed the rest from silent investors.
Now he's the owner of a company that's quickly sliding into insolvency. The balance sheet was studied. His new company wasn't earning enough money relative to operating costs. He decided to immediately raise prices and convert its industrial sewing equipment to making greeting cards once primary company priorities were met. After a few years, the company stabilize and even thrived. He didn't love this business and decided to sell once the company achieved profitability.
In total, he reaped a $90 million return on his original one million dollars investment. This was all done in the space of 4 years. But all this was small potatoes compared his next acquisition. The deal that made him one of the most successful entrepreneurs of all time.
Shortly thereafter, he was on a call with his friend, Michael Milken, from his days working on Wall Street. Reginald gave him the details of how he sold McCall, achieving 90:1 return on investment. And Michael congratulated him on a job well done. But added, "It's time for you to stop playing around. Time to get you a bigger bat to swing with." Reginald later retold this story to his wife in complete astonishment.
Side Note: Michael Milken, the infamous Wall Street Trader, was making $500 million a year during this time. So yes, to him it was a small deal.
Michael heard of a company for sell that his friend might be interested in. Reginald told him he was tired, was taking his family on vacation, but he would take a look at it soon.
The company in question was Beatrice International Food Corporation. A food processing company. Headquartered in Chicago, but its operations (huge food processing plants) were based in 55 countries around the world. It had sales of $2.5 billion dollars and even had its own fleet of jets to shuttle its executives around the world. This company was 200 times bigger than the McCall Pattern Company Reginald just sold.
As Reginald was reading about this company, his first thought was, "forget this, life is too short!" But he kept reading, late into the night. Eventually, he made a shocking realization about this company:
"The sum of this company was worth more than the whole."
This meant that the breakup value or individual processing plants could be used to finance the entire company for a mere fraction of the total cost. The next morning, he decided to bid for this company for as much money as could borrow - $985 million dollars.
Since this company was being sold in a blind auction, various global international investment banks and Reginald Lewis would have to submit a bid along with the their financing and the best all around bid wins the right to close their deal completing the purchase of Beatrice International Foods.
Days later, Reginald Lewis was informed by the investment bank conducting the sale of Beatrice that his bid had won. Now they expect him to meet the terms of his proposal and close the deal within the allotted time frame given. He later sold off 5-6 processing plants to finance nearly 2/3 of the total purchase price.
The next day, August 5, 1987, the business world went nuts. Camera crews from around the globe camped out on the grounds of Reginald's Long Island Mansion. The Wall Street Journal called him the 'Jackie Robinson' of the business world. He made history on many fronts:
*It was the largest offshore acquisition in U.S corporate history (at that time).
*It was the largest offshore acquisition in U.S. corporate history performed by a single individual. (Record still stands). To this day, this feat hasn't been repeated.
*He was the first African American to own a global corporation with sales over a billion dollars.
*He was the first African American to appear on Forbes Magazine List of the 400 richest Americans.
Incredibly, he bought this global corporation with now $2 billion dollars in sales with $15 million dollars of his own money while only adding only $300 million to the balance sheet.
Reginald ran this company for 5 years achieving record profitability in 1989 and 1990. In January 1993, after a short illness he died of a brain tumour at 50 years of age. He left behind a wife, two kids and an estate valued at over $400 million dollars.
Even in death, Reginald Lewis wasn't finished shocking the world. In 2013, 20 years after his death, his daughter, herself a Harvard graduate, gave in to the urgings of friends and family and decided to write a book about her dad. As part of the research, she went to Harvard Law School to pick up his University transcript. As she was leaving the building, she decided to take a peek at his grades. She stopped in her tracks. Her mouth dropped. All she saw was C's and D's!!!
By Dwayne Williams