MIAMI, March 3: Sunbeam Corp chairman Albert Dunlap continued his transformation of Sunbeam on Monday, announcing the acquisition of Coleman, First Alert and the maker of Mr Coffee products for nearly $2.5 billion.Sunbeam said it is buying outdoor recreation and hardware firm Coleman Co Inc, whose brands include Coleman and Eastpak; Signature Brands USA Inc, which makes the Mr Coffee line of coffee makers; and First Alert Inc, which makes smoke alarms and other home safety equipment.``Sunbeam will have an arsenal of leading consumer brands with an unparalleled cost structure,'' Dunlap said during a conference call, touting the global reach the company gains by buying Coleman, which distributes its products in 100 countries. ``We believe we are creating an extremely global durable product company,'' he said.
Sunbeam said it expects the acquisitions to triple its annual revenues, produce initial savings of about $150 million pretax and generate substantial increases in earnings per share in 1999. Thecompany expects to take a one-time charge this year to consolidate the deals.
Sunbeam reported revenues of $1.17 billion for 1997. Wall Street hailed the deal, sending Sunbeam's stock up $4.375 to $45.75 on the New York Stock Exchange. Signature rose $2.78 to $8.03 on Nasdaq. First Alert was up $2.03 at $5.16 and Coleman soared $10.31, or 50 per cent to $30.94, both on the NYSE. ``I think that for them to stay closer to home in terms of buying brands and categories and product lines so that they can leverage their distribution and manufacturing, and the fact that they are selling to a similar customer base ... that is the key thing for me,'' said Justin Maurer, who follows Sunbeam and Coleman at McDonald & Co.
Sunbeam also said that Dunlap, known as ``Chainsaw Al'' for his success in slashing jobs and boosting share prices at the companies he has headed, had signed a new three-year contract, quashing rumours he was leaving the Delray Beach, Fla firm.
Before coming to Sunbeam, Dunlap, author of a bookcalled ``Mean Business: How I Save Bad Companies and Make Good Companies Great,'' engineered a ``revival'' of Scott Paper that led to 11,200 layoffs and the sale of the company to Kimberly-Clark.
Since joining Sunbeam in July 1996, he has closed 75 per cent of its facilities and halved the firm's work force to 6,000 employees, a downsizing considered to be the highest-percentage corporate layoff ever.But he has also made the company a success and won favour on Wall Street. In January, Sunbeam reported record fourth-quarter earnings on a 26 per cent surge in sales.
Terms of Dunlap's new contract were not disclosed, but,calling himself ``the greatest bargain in corporate America,'' he said it was ``stock-oriented.''Dunlap said he was not done with his overhaul of a company that in nine years has gone through bankruptcy, changed its name and business from an industrial conglomerate to an appliance maker, and moved its headquarters three times.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
