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April 2008

Acquisition king
C. Dean Metropoulos - and sons

C. Dean Metropoulos is among the Grand Marshals of this year’s Greek Independence Day Parade in New York City and a classic rags-to-riches story of an immigrant son who made good.

by Dimitri C. Michalakis

“I’m in the acquisition business,” says C. Dean Metropoulos simply. “And I love it. I love finding opportunities, negotiating the deals, repositioning the businesses, many of which are troubled, though many are not. Even with healthy companies, you can still find wonderful ways to make them grow organically or via strategic add-on acquisitions. There are many opportunities out there that need energy, focused hands-on management and financial expertise.”

And in 25 years of deal-making (the majority in consumer product companies: “I like basic industries that I can understand and I can contribute to”), Metropoulos has earned a sterling reputation in the private equity investment world. He’s made over 68 “acquisitions” over those years involving $12 billion of invested capital. The Morningstar Group was acquired for $1 billion in 1996, International Home Foods for close to $3 billion in 2000 and taken public and Hillsdown Holdings for $4 billion that same year. In 2004, his Greenwich, Connecticut-based CDM Group acquired Pinnacle Foods, which owns a bundle of venerable brands such as Aunt Jemima, Duncan Hines, Log Cabin, Swanson frozen dinners, Armour canned meats, Lender’s bagels, Celeste Pizza, Mrs. Paul’s seafood and Van De Kamp’s, among others. Pinnacle was sold to Blackstone in 2007.

“If we’re proud of anything, it’s that no one has ever lost money with us,” says the 60-year-old acquisitions maven, who says he’s generated an average 44% return for himself and his various banking and financial partners. “No one has ever been disappointed. You can talk to JP Morgan, Goldman Sachs, Morgan Stanley, Lehman, or Bank of America and the feedback will be one of consistent respect. Integrity and performance is how they define CDM & Co. Our integrity is everything. I always say that to the boys, and their mother reinforces it stronger than I do.”

His wife of 30 years is Marianne (now producing a movie and a founder of the “Campaign to End Childhood Hunger” and Paul Newman’s “Hole in the Wall Gang” cancer camps) and the boys are his sons Evan, 27, and Daren, 24, who have been principals in his various enterprises since they were barely old enough to peer over the conference table at their father’s various companies.

“My two sons have tremendous creative ideas on how to resurrect iconic brands that have been around for a very long time but have lost their competitive appeal,” says their father proudly. “They bring fresh, guerilla-marketing ideas and outside-the-box thinking. They push me harder than I’d like to be pushed, but they challenge me and often change my views.”

Evan graduated high school at 16 and was the youngest MA intern at Deutsche Bank’s London office and together with his brother was advising his father right from the start. Metropoulos loves to tell stories about their business prescience and what he calls their “wonderful virgin views and perceptions.”

“Chef Boyardee was a wonderful $600 million iconic brand which they helped me recreate,” he recounts with relish. “My wife Marianne and I were driving up to Boston from Greenwich and the boys were 14 and 16 years old at the time. While on Route 95, they saw a WWF billboard on the side of the road and one of my sons says, ‘Dad, is that WWF?’ I wasn’t sure. But when we get back to the office on Monday, Evan takes one of my senior VPs of marketing, a professional who makes a couple of million dollars a year, and he says to him, ‘Let’s go visit WWF.’ So they go down to WWF headquarters and my son tells the receptionist there, ‘I’d like to see Vince McMahon. We own a company called International Home Foods, which includes things like Chef Boyardee, and we want to do a deal with him.’ Now remember, International Home Foods, at the time, was a $3 billion dollar business. And Vince McMahon, the owner of WWF, is a very commercial animal.”

McMahon’s wife Linda, president of WWF, came out to the talk to the youngest business executive and he convinced her to strike a deal with International Home Foods. “Dad,” Evan told his father later, “this is a perfect demographic for this product. All these people who watch WWF, they’re great consumers for Chef.”

“So,” his father concludes, “we got into this very financially-attractive relationship where WWF would market our product and also shoot our ads. American Home Products, which had previously owned the brand, would spend $800 million shooting product ads, but with WWF, which has an in-house production company, we spent barely $200,000. And we got to use people like The Rock, Cold Stone, Mankind and get featured at all their internationally televised events. That was a phenomenal thing.”

Another phenomenal thing, he hurries to relate, was the Gulden’s Mustard deal with Jennifer Aniston proposed by the boys.

“Evan had gone to the Ionian Village in Greece and there he met Jennifer Aniston’s cousin from Philadelphia,” Metropoulos tells the story. “And Jennifer and Kevin Bacon were shooting a movie called Picture Perfect. In the movie, Jennifer plays a young advertising executive coming out of graduate school, working for Kevin Bacon and trying to sell him on how she was going to put a big campaign behind a brand. My son read this and through the Aniston cousin he met at the Ionian Village he got in touch with Jennifer Aniston’s agent and we got the name of Gulden’s Mustard in that movie for nothing: as the brand that Jennifer was pushing on Kevin Bacon. It became part of the plot. Forty-three minutes of that movie featured Gulden’s Mustard. You can’t buy that kind of advertising!”

Then there was the boys’ coup with Bumble Bee tuna, which their father had acquired (and which Evan headed as president at 17 and Daren at 14—“That’s a $700 million company!” their father exclaims).

“And one day my wife was driving up to the Greenwich school here and the boys were listening to the radio talk show host Howard Stern,” he tells that story. “And Howard mentioned somewhere in these wisecracks that his mother never fed him, so he’d always come home and open up a can of Bumble Bee tuna and that was his favorite meal. When Evan heard that, he comes home from school and he calls the station and he says, ‘My name is Evan Metropoulos. I’m the president of Bumble Bee Tuna’—he didn’t tell him how old he was—‘And I’d like to come and talk to you about advertising the brand on the show.’ So Evan goes with his brother Daren plus two of our attorneys and when they get there the boys were 16 and 14 and they sit in a conference room and they make a deal to advertise Bumble Bee tuna on Howard Stern. And it was a very attractive deal and Howard would pitch it all the time and the boys became his favorite guests. But I told them, ‘Boys, you let him suck you into sexual stuff and I’m going to pull the plug.”

Then there’s the story of how their father acquired Perrier Jouet champagne and the boys made it the cool and “in” champagne for the young affluent market by having their friends in the entertainment industry feature it in their videos and concerts. “Snoop Dog, Limp Bizkit, all of them, the boys would donate the champagne and when these guys did their concerts and videos they would open up our champagne. In fact, it was even worked into some of their lyrics. And it became a very hot little brand.”

Metropoulos is justifiably proud of his sons’ business prowess and loves to talk about it, but then again he was no slouch himself as a business wunderkind.

Born in Greece, he came to America at nine when his father came looking for a better future for his children. “And he made a very great sacrifice, like many immigrants before them. My parents both worked very, very hard and I pause at least once a day, because I lead a good life, and I say none of this would be possible if it wasn’t for the tremendous sacrifices by my mom and dad, Katerina and Jimmy. They are blessed people.”

The family lived in Watertown, Massachusetts, where Jimmy Metropoulos worked at the Star Market and later owned a restaurant in Newton called Cabot. Metropoulos went to college on a scholarship, and after graduate school at Babson and a year-and-a-half towards his doctorate at Columbia, he went to work for GTE.

“I worked for this wonderful company called GTE, which is now Verizon, and I was 24 years old, and I lived in Europe, Paris, Hong Kong, Geneva and London, and in my 20s I was running the international business as the youngest senior VP in the company’s history and I loved it,” he rhapsodizes still. “We had joint ventures in Argentina, Mexico, India, Japan and operated in 62 different countries. And I fell into a situation on my first deal where I bought a very small business in Europe and it turned out to be very successful and it got me into the acquisition business.”

That first acquisition was a company based in Italy and Belgium that manufactured space heaters and air conditioners and, he says, “I bought that business with all the money I ever had, plus I sold this beautiful factory which was worth about $58 million to a real estate family in Italy, I sold it for $42, so I could use the money to buy the company.”

The price tag of that first acquisition was $72 million and for a time the young executive had his hands full trying to keep up the cash flow and the company solvent. Until one day he was flying back to the States for a Greek wedding and he happened to sit next to a Honeywell executive in charge of the company’s joint ventures in Europe.

“And I said to him, Who makes all the frames for Honeywell? And he said, We subcontract most of that stuff out. And I said, Gee, I have a wonderful company that can do that for you. And he said, Well, next time you go back over there I’ll introduce you to my colleagues and I’ll suggest to them that they give you guys a trial. I said, I’m taking the flight right back. He said, You’re gonna go back? I thought you were going to a wedding? I said, No I’m going right back. And I apologized to the groom and the bride and I flew back and got the order from this guy and it became a big part of our business.”

C. Dean Metropoulos & Co has grown considerably since then, and the deals now average in the billions and multi-billions, but at 60, Metropoulos says he still has the same zest for the deal and still looks for the opportunity “to grow a company” which he always did. “And if I think that I bring something to that equation of growing it financially and successfully then I go for it. If I don’t think I bring something to that equation I avoid it.”

And of course now his sons are part of the equation and the partnership works both ways.

“I respect them because they do push me harder than I’ve ever been pushed,” he admits. “They’re very bright and very creative. But I tell them to root all their decisions on business fundamentals and have integrity and compassion above all. And we all agree, if you don’t enjoy what you’re doing, don’t do it. We all love what we’re doing and we love working with each other.”

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