Ron Perelman, one of the wealthiest men in America, sits down for his first ever Q&A.
Marvin R. Shanken
From the Print Edition:
Ron Perelman, Spring 95
(continued from page 11)
Shanken: He must be very proud of you.
Perelman: You'll have to ask him.
Shanken: What and when was your first real break? I am sure that whatever it was, it had high risk.
Perelman: The core was a company called Cohen Hatfield Industries that I purchased control of in 1979. It was a low-risk transaction. It was then in the wholesale and retail jewelry business. And I bought 40 percent of the stock from one seller. It was an American Stock Exchange-listed company, and I bought it at, I think it was 35 percent of stated book value, and stated book value was understated by about 40 percent because gold and diamonds had started a real run-up at that time. The point was to get out of the jewelry business and use those proceeds to invest in a business that I felt more comfortable with. Our first large transaction after Cohen Hatfield was MacAndrews & Forbes.
Shanken: How big was the jewelry company at the time?
Perelman: Sales of under $50 million, $40 million or $50 million. I bought my 40 percent for about $1.5 million.
Shanken: That isn't bad.
Perelman: And that allowed us to take the next step of buying MacAndrews & Forbes, which was a New York Stock Exchange company, and their two businesses, plus cash--they had just gotten out of the textile and fiber business, and they had about $15 million in cash. They were in the chocolate business. They were the largest independent manufacturer, other than Hershey, of chocolate for food manufacturers, and they were in the licorice business, being the largest supplier of licorice extract to the tobacco industry.
Shanken: And how big was that company?
Perelman: They did probably $120 million. We then sold off the chocolate business.
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