After 18 years of being a major owner of Owens-Illinois Inc., the New York investment firm Kohlberg Kravis Roberts & Co. is totally out of the picture.
Late last year, KKR's partners sold nearly all of the company's 36 million shares - about a fourth of O-I's outstanding stock - for more than $800 million. Early this year, they sold an additional $39 million worth and now own just a fraction of 1 percent of the glass-container maker's shares.
And four KKR partners either resigned from O-I's board or opted not to stand for re-election in the last couple of years, opening the way for O-I in the past eight months to bring in three new board members with a wide range of experience. The last of the KKR directors left the board a month ago.
The combination of events leaves O-I in control of its own destiny. Steven McCracken, who took over as O-I's chairman and chief executive officer last year, is the first O-I chieftain in nearly two decades to operate completely free of KKR control.
So, what exactly is the legacy of KKR - this band of legendary takeover artists, the "kings" of leveraged buyouts - at Owens-Illinois?
KKR certainly left O-I lean and mean, but the takeover firm's "discipline of debt" also forced O-I to sell off billions of dollars worth of operations. And during KKR's tenure, O-I shed 25,000 jobs worldwide. (On top of 24,000 jobs O-I lopped off before the KKR takeover in early 1987).
Still, it could have been worse. Much worse. O-I and its two local publicly traded spinoffs - Manor Care Inc. and Libbey Inc. - still have headquarters here, O-I and its spinoffs employ about 3,000 in the region, and the three firms have annual sales in the $10 billion range.
"I don't think KKR will have much of an impact on the overall history of O-I," said Richard Lock, of Sylvania, retired vice president and treasurer. "When the history is written, O-I was a glass-container company, and it still is. The basic company hasn't changed that much."
Some business segments O-I sold after KKR took over 18 years ago would have been sold anyway "because they were too small to compete" in their industries, Mr. Lock said. In that category was O-I's Forest Products division, which fetched nearly $1.2 billion. More recently, O-I sold off its plastic-bottle plants for $1.2 billion.
But O-I also spun off some large, competitive units like Health Care & Retirement Corp. (now Manor Care, the nation's largest nursing-home operator), and Libbey. a leader in glass tableware.
Jack Paquette, of Sylvania Township, a retired vice president, said KKR's legacy doesn't amount to "a darn thing. They took a company that was sizable and very diversified and trimmed it back to what it was when I came to O-I more than 50 years ago.
"They destroyed the company in terms of long-term viability. Today, it's just like a commodity company. It's just like selling No. 10 coal."
However, Mr. Paquette acknowledged that KKR's partners were "young guys and very smart." Mr. Lock also said he thought the KKR partners, six of whom were on O-I's board at one point, "are pretty good people."
Max Powell, of Ottawa Hills, a retired vice president, said the pre-KKR O-I tried numerous ways to diversify, "but everything they tried was less successful that good old glass bottles."
He maintained that KKR was attracted to O-I because it looked for companies with hidden value, which it could exploit, and it found that in O-I.
KKR, which had a reputation for dismembering some companies it took over, treated O-I rather well, Mr. Powell said. The takeover firm's partners respected the Toledo company's management, at least partly because it financed formation of Lily-Tulip Inc. in 1981, largely an O-I spinoff.
"I give Joe Lemieux a lot of credit [for holding O-I together]," Mr. Powell said, referring to now-retired O-I chairman and CEO.
During KKR's tenure, O-I expanded its glass-container operations by acquiring Brockway Inc. for $750 million in 1988 and Europe's BSN Glasspack for $1.4 billion last year.
The departure of KKR partners from the board has allowed the Toledo Fortune 500 firm to bring in Helge Wehmeier, retired vice chairman of pharmaceutical giant Bayer Corp.; Corbin McNeill, Jr., retired chairman and CEO of Exelon Corp., a large utility; and Albert Stroucken, chairman and CEO of H.B. Fuller Co., a maker of adhesives and chemicals.
Never mind that the repositioned firm's headquarters will be in Perrysburg by the end of next year. Never mind that O-I and its spinoffs employ just over half of the 5,600 the firm employed in the Toledo area a quarter-century ago.
It could have been worse.
The barbarians have left the gate. The house is somewhat intact. They were pretty civilized after all.
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