Vacuum Cleaners Discussions

Anyone have any info as to what is happening with Oreck? The lawsuits, Chinese Investors, etc. Is Tom being pushed out?

Hello Lucky1:

I've heard some rumors.  Nothing substantiated.  Dave is getting on in years.  ORECK is his baby from the cradle.  Not sure the ORECK family feels the same way as he does.  One of the draw backs of a family owned and run business.  Especially when you need financing from time to time from others to see you through the lull periods.  And right now banks are not loaning let alone to vacuum makers. 

Carmine D.

Some insight > http://74.125.95.132/search?q=cache:LHlH2sO9DnkJ:www.creditinvestmentnews.com/article.aspx%3FarticleID%3D1279499+oreck+lowers+rating+loan&hl=en&ct=clnk&cd=1&gl=us&client=firefox-a

DysonInventsBig wrote:
More > http://en.wikipedia.org/wiki/Oreck_Corporation     http://en.wikipedia.org/wiki/American_Securities_Capital_Partners

I suspect the article on ORECK and the need for additional financing and cash flow [circa 2005] may be related to the ORECK move to Cookville, Tennessee after Katrina hit in August 2005.  Just a hunch.  And the reason in part for the downgrade on debt.  Not sure what the amount of the insurance proceeds are for the total  disaster of the ORECK building and its inventory.  And how soon after Katrina that ORECK received the insurance payout.  All of which affect the timing of the money to ORECK for relocation of the business and its employees. 

Carmine D.

DysonInventsBig wrote:
Did I read this right or not.... "RBS led $140 million of senior debt backing ASCP's leveraged buyout of Oreck in March 2003" The Chinese led ASCP has owned Oreck since 2003?

Given the huge trade deficits we've had with China, it's not surprising that the Chinese have lots of cash available to buy US assets.   We will unfortunately see a lot of American companies bought out by the Chinese at fire sale prices.  I don't know if Oreck is one of them. 

Granted the article is old, January 2005, and has been overtaken by events and circumstances. 

It appears from this article that the RBS/American Securities Capital Partners stake is "an investment" not a buyout and more specifically from this article a refinancing of existing debt which was incurred by ASCP in 2003 for ORECK.  Also of mention, ORECK relocated to Tennessee, after Katrina in August 2005, later in the year of this article.  At the time, a perfect opportunity for the investors to move ORECK offshore if they wanted.  But they didn't, preferring the Tennessee, USA location.  As I understand it, American Securities Capital Partners, who invested its money in ORECK in 2003 partnered with the Royal Bank of Scotland in January 2005 to refinance the initial investment for ORECK.  The payout of a dividend to ASCP suggests that the original ORECK investment is profitable as of Januray 2005.  Also, ASCP only invests in USA and Canadian businesses.  

The last I knew, since 2003 the ORECK corporation has been jointly owned by the private investment firm American Securities Capital Partners and Tom Oreck.  Also, an interview with Bill Fry, the CEO of ORECK about ASCP.  Fry is the 5th gentleman in the top row.  Click on his photo at this site.

http://www.american-securities.com/default.aspx

Also, CNBC and CNN interviews with Michael Fisch, President of ASCP at the site below.  Both worth viewing.

http://www.american-securities.com/?CatId=32&Id=21

My guess and my advice to Dave is that at some time in the future, probably when US markets and global economies are better, ASCP and ORECK should go public with an ORECK IPO.  Why?  Two reasons.  One: An infusion of cash from the sale of stock.  And, TWO: It gives ORECK, as a company, perpetual life which is not dependent on the health and well being of the ORECK family.   According to Fisch in the above interviews, this IPO generally happens from 5-7 years after the initial ASCP investment in the company.  In the case of ORECK that is early 2003. 

Carmine D.

More info on Oreck > http://www.alacrastore.com/company-snapshot/Oreck_Corporation-2526952

I wondered about two things when I passed the TN factory.

1. 'Reserved parking for rickhaws' signs on the parking lot.  2. Laundry baskets sitting all around the premises.

Jun 29, 2007:  Goldman Sachs & Co. on Friday pulled its $200 million refinancing loan for Oreck Corp...

http://www.reuters.com/article/bondsNews/idUSN2942946020070629