Hong Kong Firm to Get Controlling Interest of Top Wheelchair Maker
A Hong Kong investment company with interests in several American firms said Wednesday that it reached agreements on stock purchases that would give it voting control of Everest & Jennings International of Camarillo, the world’s largest manufacturer of wheelchairs.
Industrial Equity Pacific Ltd., which holds 29% of Everest & Jennings’ Class A stock, said it agreed to buy additional Everest & Jennings Class A and Class B common shares from members of the Jennings family, a related trust and an institutional shareholder.
In addition, it said the agreements would give it certain voting rights to more shares of the Class A and Class B common. The additional purchases would increase its stake to about 48% of Class A shares and about 51% of Class B shares, Industrial Equity said. That would result in more than 50% of the shareholder voting power, the company said.
Everest & Jennings’ Class B common has 10 times the number of votes as the Class A shares.
The investment firm said it had no plans to make further significant purchases of Everest & Jennings stock. The current agreements are subject to conditions, including compliance with federal antitrust regulations and a restructuring of the Everest & Jennings board to give Industrial Equity effective control.
Industrial Equity, controlled by New Zealand millionaire Ronald A. Brierley, has invested in some 40 American companies. It holds a 14.9% stake in Cummins Engine Co. among others. In 1987, it bought Wrather Corp, which owned the Disneyland Hotel in Anaheim and leased the Spruce Goose and Queen Mary in Long Beach, with Walt Disney Co. But Disney later bought Industrial Equity’s share.
Everest & Jennings said its board appointed Barre L. Rorabaugh, an Industrial Equity consultant, to fill a board vacancy. “We will be evaluating all aspects of the business and would not be making any board changes until the next regular scheduled board meeting scheduled for Jan. 18,” said Robert G. Sutherland, Industrial Equity president and a director of Everest & Jennings.
Sutherland said Industrial Equity has been an investor in Everest & Jennings for four years and supports the company’s restructuring to divest its non-medical businesses and focus on its core businesses, which include other medical equipment besides wheelchairs.
Everest & Jennings President and Chief Executive Whitney A. McFarlin said Industrial Equity has worked closely with Everest & Jennings on strategy for refocusing the company. He said the company has recently sold its metal casting companies and some of the wheelchair motor manufacturing operations.
Everest & Jennings, founded in Los Angeles in 1932, has suffered some financial setbacks in recent years as a result of expansions into other businesses and increased competition in the markets for wheelchairs. The company reported a profit in 1988 but posted a $9.5-million loss for the first nine months of the current year. It is expected to have about $200 million in revenue for 1989.
