From Lawn Mowers To The Infobahnby
By the time President and CEO Jack Phillips gets done revamping Actava, it will bear little resemblance to the Fuqua Industries it was when he and his group acquired it in April. Whispers are that Phillips has lined up several deals for an acquisition in telecommunications and information systems.
The purchase will be preceded by the closing of an agreement in mid-August to sell to Eastman Kodak the 50% Actava stake in Qualex, the wholesale photofinishing giant that the two own jointly. People familiar with the deal say Kodak will pay Actava $150 million for its share. Talk of such a purchase has spurred Actava stock to jump from 71/2 to 10 in recent days. Some big investors think the stock could double in a year if Phillips' overall scheme goes through.
Once the Qualex deal is done, say these pros, Phillips will proceed with selling off Actava's remaining business, Snapper Power Equipment, which makes lawn mowers, tractors, garden tillers, and snowblowers. A couple of companies have expressed interest in Snapper, and insiders say a deal will be signed soon. In May, Phillips sold Actava's four sporting-goods companies to Roadmaster Industries for $78 million in stock. The deal gave Actava a 40% stake in Roadmaster, which is a major producer of bicycles and fitness equipment.
Financier John Kluge, who owns a big chunk of Actava, is expected to become chairman upon completion of Phillips' plan to transform Actava into a communications company.