No Holds Barred: Schwartz Takes Onex to the Top
No Holds Barred: Schwartz Takes Onex to the Top
After four years, Onex went public in a sale that raised $246 million. Schwartz, however, kept control over 60 percent of the company. By that time, he had already acquired five companies for $1.3 billion. Everything was smooth sailing for Schwartz until the early 1990s, when a general recession hit the country. Shareholders began to question the large stock dividends that Schwartz was gaining from the company. What began as a share price of $20.50, dropped to $4.75 in 1990. As a result, Schwartz was forced to sell off many of his acquisitions, including Beatrice Foods. Although he made a profit on some, many were sold below cost.
Schwartz decided to change the company’s compensation system for executives, and soon Onex was bouncing back. At the time, Schwartz told his shareholders, “I don’t feel much need to prove anything to anybody. I think Onex will speak for itself.” Some of its previous acquisitions, including Sky Chefs and Burger King, began to pay off. As the country’s overall economy regained its strength, so too did Onex, and at a much faster rate.
After the rebound, Schwartz gained a reputation as the go to guy for a company that wanted to increase its shareholder value. Many of his next acquisitions would be good decisions, including Cineplex, ClientLogic, Qantas, and Celestica. Two attempted deals, however, would thrust Schwartz back into the media spotlight.
In 1995, Schwartz lost his hostile bid of $2.3 billion to buyout John Labatt Ltd., a popular brewer in the North American market. Four years later, his attempt to acquire and merge Canada’s two largest airlines was not received well in the media. In the end, a Quebec judge ruled the bid illegal at the last minute, and Schwartz was left to lick his wounds.
Today, Schwartz explains, “Onex is a holding company and takes an active role in the strategic and financial direction of its subsidiaries. Our goal has always been to build individual subsidiaries into a position of being number one or two in market share in the world, or at least in their niche.”
Onex maintains two distinct branches of its company, one a traditional side that is comprised of such business as Lantic Sugar, a sugar refining business. The other is composed of more modern, technological companies. “The digital revolution and e-commerce are just in their infancy,” says Schwartz, “and we’ve been trying to find ways to put our hook into that rocket ship as it goes up.”
For all of his achievement, Schwartz was named Ernst & Young’s 2005 Entrepreneur of the Year. He was also made an Officer of the Order of Canada in 2006. When he’s not acting as Onex CEO or serving as a director of Scotiabank, Schwarz keeps busy reading one book a week, playing tennis and pool, and sailing. “I enjoy the independence of single-handling a boat,” he says. “I like controlling the elements, making the wind and the waves and the water work for me.”
No Holds Barred Schwartz Takes Onex to the Top
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In 1983, Schwartz founded Onex with one single mission at hand: to search for and acquire under-managed and undervalued companies, streamline their operations, and sell the acquisitions for a profit after their asset bases had been added to. Early on, Schwartz focused on purchasing such big name companies as Purolator Courier Ltd., an in-flight catering company called Sky Chefs Inc., and Beatrice Foods. He sought to acquaint himself with companies that already had a recognized brand name that he could draw upon.
After four years, Onex went public in a sale that raised $246 million. Schwartz, however, kept control over 60 percent of the company. By that time, he had already acquired five companies for $1.3 billion. Everything was smooth sailing for Schwartz until the early 1990s, when a general recession hit the country. Shareholders began to question the large stock dividends that Schwartz was gaining from the company. What began as a share price of $20.50, dropped to $4.75 in 1990. As a result, Schwartz was forced to sell off many of his acquisitions, including Beatrice Foods. Although he made a profit on some, many were sold below cost.
Schwartz decided to change the company’s compensation system for executives, and soon Onex was bouncing back. At the time, Schwartz told his shareholders, “I don’t feel much need to prove anything to anybody. I think Onex will speak for itself.” Some of its previous acquisitions, including Sky Chefs and Burger King, began to pay off. As the country’s overall economy regained its strength, so too did Onex, and at a much faster rate.
After the rebound, Schwartz gained a reputation as the go to guy for a company that wanted to increase its shareholder value. Many of his next acquisitions would be good decisions, including Cineplex, ClientLogic, Qantas, and Celestica. Two attempted deals, however, would thrust Schwartz back into the media spotlight.
In 1995, Schwartz lost his hostile bid of $2.3 billion to buyout John Labatt Ltd., a popular brewer in the North American market. Four years later, his attempt to acquire and merge Canada’s two largest airlines was not received well in the media. In the end, a Quebec judge ruled the bid illegal at the last minute, and Schwartz was left to lick his wounds.
Today, Schwartz explains, “Onex is a holding company and takes an active role in the strategic and financial direction of its subsidiaries. Our goal has always been to build individual subsidiaries into a position of being number one or two in market share in the world, or at least in their niche.”
Onex maintains two distinct branches of its company, one a traditional side that is comprised of such business as Lantic Sugar, a sugar refining business. The other is composed of more modern, technological companies. “The digital revolution and e-commerce are just in their infancy,” says Schwartz, “and we’ve been trying to find ways to put our hook into that rocket ship as it goes up.”
For all of his achievement, Schwartz was named Ernst & Young’s 2005 Entrepreneur of the Year. He was also made an Officer of the Order of Canada in 2006. When he’s not acting as Onex CEO or serving as a director of Scotiabank, Schwarz keeps busy reading one book a week, playing tennis and pool, and sailing. “I enjoy the independence of single-handling a boat,” he says. “I like controlling the elements, making the wind and the waves and the water work for me.”
No Holds Barred Schwartz Takes Onex to the Top
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
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