2 Executives Preparing Buyout Bid for RB Unit
Two executives of RB Industries are preparing an offer to buy the company’s RB Furniture division, Chairman Joseph Sinay said Thursday.
Laurence A. Crink, president of the Irvine-based RB Furniture division, and James M. Brightman, chief financial officer of the Century City-based parent company, said they plan to make a leveraged buyout proposal for the furniture division but haven’t made the offer yet. In a leveraged buyout, a company is bought with borrowed money to be repaid with cash generated by company operations or by the sale of assets.
RB Industries has hired Financo Inc., a Philadelphia subsidiary of Shearson Lehman Bros., to evaluate RB Furniture and RB Industries, Sinay said. Financo will help RB Industries evaluate its alternatives, including seeking other offers for the division or the entire company, he said.
“We don’t have a signed agreement with them, and we want to do everything we can to maximize value for the shareholders,” Sinay said.
Exactly what the executives will offer to buy and how much they will pay will depend on the Financo analysis, Crink said. In addition to its 55 RB Furniture and four W&J; Sloane stores, RB Industries owns a real estate company called Laurel Development, Sinay said.
Crink said he and Bateman would like to buy the profitable furniture operation because “we believe that with . . . some new blood and some aggressiveness that we think our youth brings to the business, it can be a much more successful operation.”
Following a $16.98-million loss on revenue of $116.5 million for the fiscal year ended June 30, 1985, RB Industries recorded net income of $734,000 on revenue of $54.8 million for the six months ended Dec. 30. The company said last November that it would focus on returning to profitability during fiscal 1986 and had no plans for expansion.
Sinay said he is “optimistic” that the company will be profitable for the year. “While the market is soft, it looks pretty good to us,” he said. RB Industries has about 1,200 employees.
