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62 °F Forecast | Road Cams Thursday, July 1, 2004 Today's News | Classifieds | Autos | Homes | Jobs | Tempo | Health | Community | Home Delivery SECTIONS Home Page Local News Sports Business Obituaries Life Opinion - Politics Tempo AP News Weather Classified Archives Site Map SPECIAL SECTIONS Since We Asked Outdoor Journal Prime Times Wellness Connection Readers' Choice Real Estate Showcase Joy Magazine Homelife Magazine Wedding Guide Rogue Valley's Finest EXTRA Newspaper in Education Personals Movie Times TV Times E The People MARKETPLACE Find a Car Find a Home Find a Job Classifieds Place an ad eSouthernOregon Automotive Communities Entertainment Publications Recreation Calendar CUSTOMER SERVICE Frequent Questions Advertising Information Home Delivery Employment Contact Us Media Kit Network Affiliate Oregon Road Conditions & Cams Email Story to a Friend April 3, 2004 The Rogue Valley�s largest employer, Bear Creek Corp. announced Friday that the company is being sold to a New York investment company. Mail Tribune / Jim Craven N.Y. firm to buy Bear Creek Wasserstein & Co. isn’t saying much about the Medford company’s future By GREG STILES Mail Tribune Wasserstein & Co., a New York acquisitions and merger firm, has agreed to buy Medford’s Bear Creek Corp. from Japan’s Yamanouchi Pharmaceutical for $260 million. The company’s employees were informed early Friday morning after the Yamanouchi board of directors signed off on the deal. But beyond making that announcement, company officials have shed little light on the transaction. Yamanouchi said in its release that the sale was part of its decision to "concentrate our management resources in our core (drug) business, and to further strengthen our business platform in the increasingly competitive global pharmaceutical environment." That shift was underscored on Feb. 24 when Yamanouchi announced plans for a $7.9 billion acquisition of fellow Japanese firm Fujisawa Pharmaceutical. The Tokyo-based conglomerate concurrently announced Friday that Shaklee Corporation, Shaklee Japan and INOBYS were sold for $310 million to Activated Holdings LLC and RHJ Industries, an affiliate of Ripplewood Holdings LLC, a New York investment firm. Bear Creek, the Shaklee business and INOBYS were all units of Pleasanton, Calif.-based Yamanouchi Consumer Inc. Advertisement The estimated closing date for the deal is March 2005. Yamanouchi Pharmaceutical issued a seven-page release, including one page of text and six of flow charts outlining the deal. But it revealed little about Bear Creek’s future. Just as negotiations with suitors were cloaked in secrecy, so was the aftermath of the sale. Bear Creek spokesman Bill Ihle, who has also carried the title of senior vice president of corporation relations for Yamanouchi Consumer Inc., said the company would not be addressing the subject beyond the press release issued by Yamanouchi Pharmaceutical. "We’re not making any comments or further statements today," said Ihle. Phone calls requesting comment from Wasserstein & Co. offices in Palo Alto, Calif. and New York, were not returned Friday. Bear Creek’s Harry and David subsidiary grows pears and other fruit and produces baked goods and confections for mail, Internet and retail store sale. The Jackson & Perkins subsidiary is the nation’s largest mail-order nursery business, producing roses for catalogue sale and wholesale. The Business Journal of Portland ranked Bear Creek as Oregon’s second-largest manufacturing employer, behind only Intel Corp. Wasserstein & Co., owned by Bill Wasserstein, was said to be attracted to Bear Creek because of its strong, well-known brand names and the company’s stable cash flow. The buyout firm has a history of investing in branded food and consumer products companies, such as Maybelline cosmetics and All-Clad cookware. It held Maybelline for four years, taking it public after two years, before selling it off to L’Oreal in 1996. Analysts say Wasserstein may see growth for Harry and David by expanding the brand through creative marketing, better catalogs, and freshened product offerings. Todd Barr, vice president at the retail management consultant Kurt Salmon and Associates, told The Associate Press that Wasserstein may be interested in broadening Bear Creek sales, now heavily concentrated around Christmas, by expanding on Harry and David’s move into organic foods and perhaps starting to offer wholesale. Wasserstein details the company’s investment perspective on its Web site: "We seek to expand and unlock the value of our portfolio companies through active involvement and strategic support for each business post-investment. Fundamentally, we seek optimal risk- adjusted returns by investing in growing later- and expansion-stage business in sectors that are rigorously defined to offer maximum opportunities. ..." Ever since word leaked out of the New York investment community last October that Yamanouchi Pharmaceutical asked Citigroup to shop around Bear Creek and Shaklee, there has been visible and audible angst from the Bear Creek campus on South Pacific Highway to the YCI headquarters in Pleasanton. Community leaders, likewise, have waited for the other shoe to drop. "I’d say there has been a lot of collective breath-holding as the news of the possibility was talked about," says Brad Hicks, chief executive officer of The Chamber of Medford/Jackson County. "Any company with a $145 million payroll in any community in the country makes people stand up and pay attention. We all have a vested interest in their success." Bear Creek has a plant in Ohio and retail stores throughout the country. It employs more than 3,000 year-round workers and the number approaches 10,000 during the holiday sales season. Bear Creek reported more than $601 million in sales for the fiscal year ending March 31, 2003, a drop of more than $19 million from the previous year. The company’s operating profit for the year ending March of 2003, was $34.07 million, up from $23.59 million. Yamanouchi said Bear Creek’s total assets were $361.67 million in assets last March compared to $421.70 million in 2002. The global economics that attracted the Japanese conglomerate in 1989 to buy Bear Creek have changed, ending the second-longest ownership tenure of the company. Jackson County Commissioner Sue Kupillas remembers the uncertainty surrounding the 1984 sale by the founding Holmes family to R.J. Reynolds Company, the North Carolina tobacco giant. Then two years later, Shaklee Corporation bought the company, followed by Yamanouchi’s acquisition. "We live very much in an age where everything is tied to international markets, but I’m reassured that the company is based in New York," Kupillas said. "I would hope they see it as a good investment and that they’d like to hang onto it." But Wasserstein’s track record suggests something else. "Their ownership period is generally measured in months not years," says Greg Koenig, a Medford financial planner familiar with Wasserstein’s operations. "They’re interested in short-term profits and selling parts or wholes to other companies. "I’d be surprised if they were still holding it in 18 months. I wouldn’t be surprised to read a year from now that Jackson & Perkins had been sold as a separate interest." He said there could still be positive outcomes in the long run because of Wasserstein’s aggressiveness. And that’s something state regional economic development officer Bruce Laird is banking on as well. "There’s a huge upside potential with an aggressive hands-on owner," Laird said. "A great part of the value is the talented workforce." Reach reporter Greg Stiles at 776-4463 or e-mail [email protected] . Mail Tribune Home Local News | Sports | Business | Obituaries | Life Opinion - Politics | AP News | Archives | Site Map E Southern Oregon | Classified Copyright © 1997-2004 Mail Tribune. All rights reserved. Privacy Policy | Terms & Conditions Website Feedback ADVERTISERS A D V E R T I S E R S RESOURCES Oregon Road Conditions & Cams SPECIAL SECTIONS Auto Finder Job Finder Home Finder Joy Magazine Homelife Magazine Tempo Readers' Choice Real Estate Showcase Since We Asked Food for Thought Wellness Connection Outdoor Journal Moving to Southern Oregon? Volunteer Opportunities Prime Times