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

HARDSELL wrote:

Hello HARDSELL:

Looks like the Chinese are buying real estate in Tennessee!  Must be Grand Ole Opry fans.  Time to worry when the rickshaws outnumber the cars and ex-Goldman [Government] Sachs' employees are in the parking lot exchanging dollars for yuans.  And you see border signs reading:  Welcome to the People's Republic of Tennessee!

Carmine D.

There has been a lot of land purchases by foreign entities in Manhattan alone.  I don't know if it's in error but I was told that Trinity Church, the landlord of the last building I worked in in the city is actually owned by the queen of England.

Did we do much of this?  Acquistion of foreign properties (beyond military facilities) I mean.  Makes me wonder if I won't wake up one day to find our fair country has been renamed.

Venson

I also wonder if the scheme of things might change. Outside attitudes might have an influence on the manner in which business is done here.  The New York Times Online has just announced that the dairy executives involved in the melamine scandal have pleaded guilty.  They may well face life inprisonment or the death penalty. 

However, I don't what that means as some company higher-up was taken out and shot a while back due to another scandal.  No book deals or talk show spots for him like there have been for so many of our naughty captains of industry.   Nonetheless, these people went ahead with their nonsense anyway.  Geez . . .

Venson

Venson wrote:

Hello Venson:

Execution is one way to avoid the controversy over use of taxpayer bailout funds for executive compensation and bonuses.  I like it.

Carmine D.

CarmineD wrote:
Cool!  Shall we start a petition?

Venson

Hi Venson:

I think I read that the individual survived the suicide attempt but is permanently paralyzed.

WRT the foreign investors, I suspect when ORECK feels the need for cash, and it may, it will ramp up sales in the big box retailers where it currently has a very limited sales exposure.  I am very surprised it has not already.  With the Clean Home Centers in place for service and parts, big box retailers would be a likely venue for ORECK sales at the $199 price.  Tho, the drawback is price cutting by the retailers.  ORECK could probably minimize the negative impact by offering limited models in the big box stores that would not necessarily compete with its current models and giveaways [$299 plus].

BTW, one of the recent developments since the 2005 news story is that the Royal Bank of Scotland (RBS) went belly up recently and was taken over by the UK government. 

Carmine D.