Advertisement
 
(Page 2 of 2)

Corporate Savior's Toughest Test Yet

TECHNOLOGY

March 04, 2002|KAREN KAPLAN and ELIZABETH DOUGLASS | TIMES STAFF WRITERS

Mattel was so desperate to unload Learning Co. that it gave the division to Gores in exchange for 50% of future profit or the proceeds from any sale of the company. Gores' operations team consolidated business units and brands, cut hundreds of jobs, slashed spending and won over distributors.

The company stopped hemorrhaging cash within 75 days and made more than $100 million in profit in its first year with Gores Technology, according to the firm.

Gores followed that success with two other high-profile deals. In late April 2001, Micron Technology gave Gores its struggling PC unit, Micron Electronics, along with $70million. Micron Technology, eager to focus on its Web-hosting businesses, calculated the payment was cheaper than the cost of shutting the division down. About a month later, Gores took over Hewlett-Packard's VeriFone division for an undisclosed price. VeriFone is a leading provider of electronic payment systems for financial institutions and merchants. Both VeriFone and Micron are profitable now.

Gores likes to operate below the radar. But that is becoming increasingly difficult as his successes mount and his appetite grows. His indulgences include a giant house in Beverly Hills, a midnight blue Mercedes CL55 AMG and suits by Italian designer Ermenegildo Zegna.

His younger brother Tom Gores, may be an even bigger player in the turnaround business. He heads Platinum Equity, a Los Angeles firm that also specializes in high-tech buyouts. Platinum has taken on divisions shed by Alcatel, Williams Communications Group and Racal Electronics, and the brothers often compete for deals. Tom Gores, 36, made his debut on the Forbes 400 list of richest Americans this year, his estimated $1.5 billion net worth ranking him at No. 293. Alec did not make the list.

Another younger brother, Sam Gores, owns a talent agency. All three brothers live within a few blocks of each other and often socialize together, according to people who know them. Alec Gores has four children and is twice divorced.

Gores told TheStreet.com last year that he wanted to raise his game by taking over a publicly traded company. Global Crossing, which went public in 1998 and filed for Chapter 11 bankruptcy reorganization less than five years later, would seem to fit the bill.

Gores knows that winning the bidding for Global Crossing--and then fixing it--will be difficult. But long odds have yet to deter him.

"This is what we do for a living," he told the Evening Standard of London last year. "We practice it every day. It's like golf--the more you play, the better you are going to get."

Advertisement
Los Angeles Times Articles
|
|
|