Reginald F. Lewis and the Making of a Billion Dollar Empire

[Music] pioneers [Music] Reginald F Lewis and the making of a billion-dollar Empire [Music] he was a local paper boy who became a Wall Street tycoon today now I'm mad about Riggs and Louis's that take-charge kind of a guy breaking racial barriers in the corporate world reg Lewis in many ways was the Jackie Robinson business he bought a global conglomerate 64 companies across 31 countries no African American has done ever a big deal like that Reginald F Lewis pioneer [Music] support for this program has been generously provided by Taurus and Kimberly Richardson Robert F Smith and the following Reginald F Lewis was born in Baltimore Maryland in 1942 he was raised by a tight-knit family that nurtured a sound education unyielding pride and a strong work ethic my grandfather said know your job and you'll never be in a bread line by the 1950s racial tensions were deepening in Baltimore it was the site of one of the nation's first sit-ins schools were being desegregated and white flight was peaking so when we moved here all the way people just the whole way block moved out so right from the beginning we had obstacles at very young age that we were aware of but mom and dad didn't bring it home they just told us that we had to be twice as good and we had to work my father was very driven from a very young age when he was nine she decided that he wanted to become the richest black man in America he had a newspaper route in this neighborhood where he delivered Afro Americans that mom took over for him one summer when she sent him to camp he went to summer camp and for two weeks I served and collected the money and the first thing he said when he walked through the door where's my money I said I did the work I earned the money and he said mom i'ma get a lawyer and sue you so but said give him his money and he said thank you he didn't give me a tip and just left at Dunbar High School in Baltimore Reginald Lewis was a three-sport all-star athlete he played football as a quarterback basketball as a guard and baseball as a shortstop between school work year-round sports and part-time jobs Lewis had little time left for play as a teenager he was already tough minded and determined to succeed so he went to Virginia State on a partial football scholarship and then he injured his right shoulder and and what a tragic injury for a right-handed quarterback a right hand is a shortstop and a basketball player who shot with his right hand at Virginia State he made that switch and by the time he was a senior was really focused on business and school and advancing his studies which is why when he saw the ad for the Harvard Law School summer program that first year that they launched it he was already able to identify and say oh yes I want that a funny thing happened during that summer by the end of the program I really didn't care if I got in or not I've done my best and I knew I could compete my father after the eight weeks went back to Baltimore but then just like a week or two later got a call and was in and was told that he is the only person to get into Harvard Law School without formally applying graduating from Harvard Law School dad went to the best kind of job that you could have a blue-chip Wall Street law firm the one he went to was called Paul Weiss Wharton Rifkin and Garrison the ball wise experience was a very good one for me my skills developed and matured enormous Lee but at the risk of offending many friends there it was not an especially happy time for me and I never really felt at home or able to relax so in 1970 my father left Paul Weiss and started a law firm the first african-american law firm on Wall Street with some other lawyers but he only did that for a couple of years and then he moved on to have his own practice during those early years while Lewis sharpened his legendary negotiation skills he met the woman who would become his wife I met Reginald Lewis on a blind date I was the one who proposed ah we got married six months after we met yes wedding in the Philippines early in the morning it was a Holy Mass at around 7 o'clock so waking up at 4:00 my wedding gown was hand embroidered we were in a small chapel I was almost walking on clouds it's like a dream because I never intended to get married the decision was that he'll be taking care of the big expenses mortgage you know children's education I will take care of household so those first years were tough but you know I had faith I had faith in him in those lean years as Lewis's law practice and reputation began to grow he purposefully set aside time to use his legal expertise in support of civil rights I pressed map original in the early 1970s Reginald Lewis was the corporate attorney for the United Church of Christ Commission for racial justice in the early 1970s there was a backlash to school desegregation violent backlash were white prior military white supremacist groups physically attacked us at the United Christ Church in Wilmington and it was all of that attack a riot happened ten of us were arrested in 1972 and we became known as the Wilmington ten that was all about unjust arrests and so they issued a warrant for my arrest and I was in New York at the time I won't detain time at about Reginald Lewis here's a take-charge kind of a guy on the plane we discussed when the plane landed who was gonna go off the plane person who's gonna walk the plane lands and registers look I'm your lawyer follow me the sheriff reached for me even while I was stepping down the steps Reggie grabs the sheriff's officer wait a minute who are you and the sheriff's they were I'm not sure of who are you and where I'm Reggie Lewis I represent Reverend favorites I need to see your identification that's the kind of lawyer that read John Lewis was that's the kind of I would say even activists he was yes he was a wall street highly-trained corporate lawyer but he was a strong freedom fighter for civil rights but Lewis had another dream he was an intense driven risk-taker who wanted the power and the money from the world of high finance and he wanted to be the first African American to get it I remember that Ridge decided that he was going to put more time into venture capital and he wanted to form a company that he decided to call TLC group which he never would admit but we think it was for the Lewis companies that's where TLC stands for he would always talk you know at night when the children are asleep about the business about what's happening I think it's this way of decompressing I always considered it like there's a ball of string in his head and just by talking about it slowly you know it's coming out and it clarifies his mind if you have a core set of values like family like hard work like trust and these are things that will stay with you even when you may be having a difficult time in a specific problem but if you maintain the core values you can generally ride through any particular problem and in the end we'll be able to to be pleased with the result he wanted to be seen not just as an African American businessman he wanted the message to be that he was an American businessman that he was in the success in his own right he was not some sort of a token or some sort of ethnic person who they picked and then put in there he wanted to he wanted to demonstrate that it was his hard work he intelligence and his drive that made him success by the time the early 80s arrived Lewis had experienced several failed business acquisitions yet he was undeterred instead of stopping he went after an acquisition that was bigger and bolder than anything he had attempted so far any deals that we saw were always warmed-over or nobody else wanted to do it so the Makah pattern company became available and the reason it was available is because the number of units sold in that industry had declined for ten straight years yet McCall was still profitable Lewis wanted to close big leveraged buyout deals to make all the numbers work he had to buy a mature company with a predictable stable cash flow which would allow him to pay off the tremendous debt once the deal was done the big question was who could help him get the financing done the role of investment bankers is one of the great mysteries of the universe the simple fact is that you don't hire investment bankers you hire people because Phillips les had labored for many years on Wall Street with one of the top investment banks Bear Stearns I wanted her thoughts about the best price to pay for McCall we needed to get reg in touch with the people who were selling McCall and we needed to get him treated seriously so the first thing I did was to basically bridge him to the establishment in the McCall pattern transaction I my role was to provide the senior financing 19 million out of the twenty two and a half million dollars that that was the sale getting the bank part was the tough part in the early days of leveraged buyouts and 83 was the very early days I have to admit when I first met reg I wasn't told that he was black so I was a little bit of surprised when I walked out of my office there weren't that many black entrepreneurs in in New York City at the time and my thinking I put aside complete the fact that he was like I didn't see how it would how how it should or could be part of be part of the decision and then things weren't moving fast enough for reg he wanted it to close instantly I felt I was stuck on the McCall deal and was not sure whether Bear Stearns was trying to scuttle the deal or not I decided to give them a little competition and reg went out behind my back literally and he talked to other investment bankers in people maybe they could move faster he thought we dropped him there dropped him because he breached our agreement a week later I got a phone call that said I'm really sorry other words I never thought I would hear out of his mouth ever if I double your fees will you take me back we had initially had a fee I think of a quarter of a million he doubled it to half a million which was not a lot of money but it was 1983 first of all once we bought McCall all of a sudden we were in a different tier you know we were now owners or reg was now an owner of a decent-sized company with a brand name it's amazing how things changed after that all of a sudden we were getting telephone calls everybody wants to interview reg you know it was it was a huge deal TLC bought McCall patterned company with 1 million dollars and only three years later sold it for an astounding 90 million this single investment cemented Lewis's place as a major Wall Street financier and a prominent corporate takeover dealer while the media focused on him he leveraged his new wealth to help the african-american community he was Jesse Jackson's first big funder in a significant way handing Jesse Jackson a hundred thousand dollar check unsolicited and loaning his plane to Jesse Jackson for campaign trips from where I stand Jesse Jackson better understands the fundamental changes that are occurring in America and in the world today more so than any other candidate that I've heard so far this candidacy of Jesse Jackson was an inspiration to him personally and I remember the the fundraiser that my dad threw for Jesse Jackson it was really it was thrilling it was a thrilling time to feel like a black man could be in the White House in support of the campaign it was not just his support for friendship once he saw was possibility remotely possible he invested in the future he offered the rope of hope he offered what was possible he never stopped giving well the civil rights movement political leadership other universities he never stopped giving around the time of the closing of the Makah pattern company Lewis got a tip about an even bigger business opportunity beatriz international an enormous global food company was about to be sold Lewis had the audacity to go for it but he needed the financial backing of a businessman and company who were leaders in financing these deals he reached out to Drexel Burnham and Lambert he persuaded me at hello when he accomplished it McCall pattern a company that I would have never bought because I didn't feel that strong about the industry and the minute he showed me his plan for Beatrice international he had me in those days the high-yield piece of the business though was really dominated by Drexel there wasn't anybody else of any significance that was in the high you piece and you needed that high-yield piece for him to get his whole financing done one of the major challenges for black entrepreneurs was and is access to capital and what Reggie was able to do from some of the top financial firms in the market place was to articulate a vision and a rationale and in fact engender a level of credibility that people provided him with the capital and that was extraordinary we had many other people around the world approaching us whether we would finance them to buy Beatrice it was clear that Beatrice international situation that reg knew it better than anyone I think he knew it better than KKR who owned the company at the time and he had a plan Reginald Lewis knew that if he was going to pull this deal off the sale would be of historic proportions the key to this huge acquisition was figuring out how to make the tax components of this deal work and how to double the cash flow in order to pay off the massive debt if Lewis failed he would lose everything his bold gamble sell off parts of Beatrice internationals worldwide operation at the same time that he was buying it the deal closing process itself was full of drama we got a call from Drexel saying you guys are gonna have to come out here to Beverly Hills and you're gonna have to explain to us what the tax deduction is going to be or No Deal well there was a lot of negotiations going on between the senior people at Drexel and reg and his team and therefore there is always attention the closing of the Beatrice International deal took place on November 29 November 30 of 1987 that was at least to that point a very unique point in history because Wall Street had had a total meltdown the prior month in 1987 no transactions were being closed the fact that we were able to close a gargantuan deal novel for its time given its international character was this day was it was absolutely off the charts I think KKR knew we were going to have the highest bid and was going to go with us all along but they created doubt in her mind so that we effectively topped our own bid and increased it to nine hundred and eighty five million dollars but that ultimately took it I remember the day of the announcement of the Beatrice acquisition and I remember calling him to congratulate him and telling him how proud he was but I remember all the calls that went around the country of African Americans saying this is absolutely incredible it was historic in becoming the CEO of Beatrice International Lewis was catapulted into an exclusive group of business leaders at the pinnacle of Industry he bought 64 companies in 31 countries for almost 1 billion dollars so in that sense he is a pioneer no african-american has done ever a big deal like that on a leveraged buyout and so when he it hit the press it was like front pages all over the extraordinary level of debt and taxes the Beatrice international deal generated could have resulted in a financial disaster but Louis had the business acumen to prevent that from happening he closed the deal and then immediately stepped up to the monumental job of running his global business empire so uh when I was nine my dad took me on one of the twist tours of his factories I we started off in Ireland at the potato chip factory and then we went to Spain to the ice cream factory and then we went to Belgium to the bottling company and my dad talks to me and says you know this is the real business Christina these this costs like three cents and they sell it for three dollars this is the business with his legacy firmly established Luis was in pursuit of the next big deal he was starting to enjoy the fruits of his success when tragedy struck it was around New Year that the biopsy came and he was diagnosed with brain cancer I remember going home for Christmas and seeing my father not himself he had lost a lot of weight and he said it's serious baby and maybe a month later he was dead [Music] yeah it was such an intense time and it was shocking that someone so full of life really at the peak of his career could all of a sudden become operating as an african-american and this pressure cooker of New York - anse high legal drama exacts its toll mr. Lewis died when he was 50 Leslie was 19 and Christina was 12 each of us handled it differently for myself I couldn't really say their father I could not say they will be done because uh you know just like that but I never never said why me I accepted God steel but it was just so hard there is no doubt that reginal Louis's success paved the way for me and many others and I think that really is the test and demonstration of real leadership is what is the foundation that you have created what is the legacy that you've left the reginald F Lewis International Law Center is the result of a three million dollar gift that my father gave to Harvard Law School before he passed away it was the largest donation that they'd ever received from a living individual period not just black person period for Harvard Law School Lewis cared deeply about how to inspire talented people to do their best work [Music] and his daughter Christina continues his mission by creating a foundation that teaches computer programming to young african-american and Latino men all-star code is creating a new generation of Reginald Lewis's did you make this yeah we're also creating the next generation of coders video game designers and computer repairman that pioneering spark of entrepreneurship which ignited reginal F Lewis as a teenager never went out even in the face of adversity and extraordinary obstacles he accomplished what few have been able to do at a convocation speech at the University of New Mexico School of Law he delivered a message of hope and determination when we're confronted with a challenge or working against superior resources or superior odds I frequently wonder whether what we're doing is is worth me the effort and somehow I remember all of the people who went before will add even greater odds so if there's one message that I would like to leave to the class of 1990 it is that you keep going to build a better society in America to be a compassionate America that you keep going no matter what thank you very much [Applause] support for this program has been generously provided by Taurus and Kimberly Richardson Robert F Smith and the following for a complete list of program supporters visit WL IW org slash pioneers [Music] [Music]

Channel: Shabazz

Views: 151,359

Rating: 4.9274755 out of 5

Keywords: Reginald F Lewis, Business, Finance, Black Excellence, Why Should White Guys Have All the Fun?, Wall Street, Tlc Beatrice, PBS, Pioneers, Reginald F. Lewis and the Making of a Billion Dollar Empire, Virginia State University, HBCU, Baltimore, #BlackExcellence, money, investing

Id: son9vML9RVE

Length: 26min 46sec (1606 seconds)

Published: Sun Oct 14 2018