Lee International
Encyclopedia
Early history
Lee Electric (Lighting) Ltd was incorporated as a business in 1961 by John LeeJohn Lee
- Politicians and government officials :*John Lee, Baron Lee of Trafford , former Minister and Conservative Member of Parliament for Pendle, 1979–1992...
and Benny Lee
Benny Lee
Benny Lee was a British comedy actor and singer.Lee began as a performer in radio comedy programmes including Breakfast with Braden , in which he sang with Pearl Carr, Round the Bend with Michael Bentine and later It's a Square World...
(deceased), two film
Film
A film, also called a movie or motion picture, is a series of still or moving images. It is produced by recording photographic images with cameras, or by creating images using animation techniques or visual effects...
lighting
Lighting
Lighting or illumination is the deliberate application of light to achieve some practical or aesthetic effect. Lighting includes the use of both artificial light sources such as lamps and light fixtures, as well as natural illumination by capturing daylight...
electricians. Lee Electric was primarily involved in the rental of lighting equipment for commercial
Television advertisement
A television advertisement or television commercial, often just commercial, advert, ad, or ad-film – is a span of television programming produced and paid for by an organization that conveys a message, typically one intended to market a product...
and documentary
Documentary film
Documentary films constitute a broad category of nonfictional motion pictures intended to document some aspect of reality, primarily for the purposes of instruction or maintaining a historical record...
productions
Filmmaking
Filmmaking is the process of making a film, from an initial story, idea, or commission, through scriptwriting, casting, shooting, directing, editing, and screening the finished product before an audience that may result in a theatrical release or television program...
, as all principal film and television studio
Television studio
A television studio is an installation in which a video productions take place, either for the recording of live television to video tape, or for the acquisition of raw footage for post-production. The design of a studio is similar to, and derived from, movie studios, with a few amendments for the...
s were at the time equipped with their own lighting equipment.
Although the lighting rental market grew throughout the 1960s, largely due to the impact of commercial television, the market was dominated by a single manufacturer of lighting equipment, Mole-Richardson
Mole-Richardson
Mole-Richardson, also known as Mole, is a stage lighting instrument and motion picture lighting manufacturing company based in Hollywood, California...
(England) Ltd, which was also the largest rental house.
In 1967 Lee Electric started to purchase lighting equipment from the Italian manufacturer, Ianiro, which was itself attempting to establish a foothold in the international market. In addition, Lee Filters
Lee Filters
Lee Filters is a Hampshire-based UK brand of colour filters and colour gels for the lighting and camera industry. Their colour gels for stage lighting are the industry standard in Europe while competing with other brands such as Rosco....
was formed to design, market and, from 1974, to manufacture lighting filters
Filter (optics)
Optical filters are devices which selectively transmit light of different wavelengths, usually implemented as plane glass or plastic devices in the optical path which are either dyed in the mass or have interference coatings....
.
Also in 1967, BBC2 started to transmit in colour, with BBC1 and ITV
ITV
ITV is the major commercial public service TV network in the United Kingdom. Launched in 1955 under the auspices of the Independent Television Authority to provide competition to the BBC, it is also the oldest commercial network in the UK...
following in 1969. The introduction of colour transmission entailed a substantial increase in the amount of lighting needed in studios as well as on location. With a major increase in the amount of equipment available to it as a result of purchasing Ianiro equipment, Lee Electric was able to tender for and to win a five year contract with the BBC for the supply of lighting equipment for U.K. television outside broadcasts. The contract, which was retained by Lee Electric for many more years necessitated further substantial investment in equipment and established Lee Electric’s leading reputation and position in the lighting rental market.
The contract was won from Mole Richardson (England) Ltd, which was ultimately acquired by Lee Electric in 1975, and subsequently extended to 1990.
In 1968, Lee Electric purchased a 3 acres (12,140.6 m²) site in North Kensington
North Kensington
North Kensington is an area of west London lying north of Notting Hill Gate and south of Harrow Road.North Kensington is the key neighbourhood of Notting Hill...
, which was converted to provide premises for the lighting equipment rental business and a three stage film studio. Lee Electric was able to compete with the major U.K. studios because it offered its stages on a ‘four wall’ basis, that is without the requirement to use the studio's labour and equipment. Significant feature films made at the Kensington studios included A Touch of Class and The Who
The Who
The Who are an English rock band formed in 1964 by Roger Daltrey , Pete Townshend , John Entwistle and Keith Moon . They became known for energetic live performances which often included instrument destruction...
rock opera, Tommy
Tommy (film)
Tommy is a 1975 British musical film based upon The Who's 1969 rock opera album musical Tommy. It was directed by Ken Russell and featured a star-studded cast, including the band members themselves...
. In the same year Lee Electric acquired Telefilm Lighting Services Ltd, a competitor, thereby further increasing the quantity of equipment that Lee Electric could provide and expanding its range of marketing contracts.
To enhance the services offered to the television companies, Lee Scaffolding Ltd was formed in 1969 to hire scaffolding
Scaffolding
Scaffolding is a temporary structure used to support people and material in the construction or repair of buildings and other large structures. It is usually a modular system of metal pipes or tubes, although it can be from other materials...
for rigging lighting equipment for television outside broadcasts. Stagemate Ltd was also established to provide scaffolding to film production companies.
Lee Electric (Northern) Ltd was formed in 1972, primarily to service the lighting requirements of the BBC in the North of U.K. It then became a major rental house in its own right.
In 1974, Lee Enterprises
Lee Enterprises
Lee Enterprises is a publicly traded American media company. It publishes 54 daily newspapers in 23 states, and more than 300 weekly, classified, and specialty publications. Lee Enterprises was founded in 1890 by A.W. Lee and is based in Davenport, Iowa....
Ltd was formed to act as a bulk buyer of consumable items, principally for the rest of the Lee Group but also as a wholesaler to third parties. In 1975 Joe Dunton Cameras Ltd was formed to provide a camera rental service to the film industry
Film industry
The film industry consists of the technological and commercial institutions of filmmaking: i.e. film production companies, film studios, cinematography, film production, screenwriting, pre-production, post production, film festivals, distribution; and actors, film directors and other film crew...
.
In 1977, Lee Electric moved to Lee International Film Studios, Wembley
Wembley
Wembley is an area of northwest London, England, and part of the London Borough of Brent. It is home to the famous Wembley Stadium and Wembley Arena...
. Over the two year following the studios acquisition, Lee Electric completely refurbished and refitted these studios for film and television productions and commercials.
By 1979, Lee Electric had established working relationships with a number of U.S. film production companies whose lighting requirements outside of the U.S.A were serviced by Lee Electric and who used Wembley Studios. In that year Lee Electric took the strategic step of opening a lighting rental house in New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
. The establishment of Lee Lighting America was coupled with the acquisition of Belden
Belden
Belden may refer to:* Belden Inc.* Belden, California* Belden, Nebraska* Belden, North Dakota* Belden, Mississippi* Westfield Belden Village, a mall in Canton, Ohio, United States* Jack Belden, an American journalist...
, a New York based distributor and selling agent for film and television equipment, which had been the exclusive U.S. distributor for Lee Filters since 1976. In January, 1986 a second rental house was opened in Los Angeles
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
.
In August, 1984 Lee Electric acquired the famous Shepperton Film Studios complex where major films have been produced since the 1920s.
In October 1984, a new holding Company, Media Technology International PLC, was formed to acquire Lee Filters and Joe Dunton Cameras and admission was obtained to the Unlisted Securities Market
Unlisted Securities Market
The Unlisted Securities Market , which ran from 1980 to 1996, was a stock exchange set up by the London Stock Exchange to cater for companies too small to qualify for a full listing....
on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
. At that time, Lee Electric and John and Benny Lee owned in aggregate 59.3 per cent. of MTI’s issued share capital. It was considered that the allied but self-contained activities of Lee Filters and Joe Dunton Cameras could be more successfully developed under its own management and with direct access to the capital markets. In June, 1984 Joe Dunton Cameras had established a subsidiary in the U.S.A.
In June 1985, Lee Electric acquired Colortran, a U.S. manufacturer of lighting products, with a U.K. branch in Norfolk
Norfolk
Norfolk is a low-lying county in the East of England. It has borders with Lincolnshire to the west, Cambridgeshire to the west and southwest and Suffolk to the south. Its northern and eastern boundaries are the North Sea coast and to the north-west the county is bordered by The Wash. The county...
. Its products included advanced computerised dimming control systems
Dimmer
Dimmers are devices used to vary the brightness of a light. By decreasing or increasing the RMS voltage and, hence, the mean power to the lamp, it is possible to vary the intensity of the light output...
and specialist lights for theatres and architectural applications. Through this acquisition the Lee Group secured an international network of distributors and agents.
In November 1985, MTI acquired Mitchell Camera Corporation, which was based in Los Angeles
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
and was one of the oldest manufacturers of film cameras. The acquisition reduced the Lee Group’s interest in MTI to 53.9 per cent, which was further reduced to 29.9 per cent. As part of the reorganisation that took place prior to the Offer for Sale.
Lee International was formed in May 1985, and is now the holding company for the Lee Group.
In November, 1985 Lee International made a recommended cash offer for a listed company, Humphries Holdings PLC, which rents lighting equipment in Europe, manufactures low voltage
Low voltage
Low voltage when used as an electrical engineering term concerning an electricity supply grid or industrial use, broadly identifies safety considerations of the system based on the voltage used. The meaning of the term "low voltage" is somewhat different when used with regard to a more typical end...
lighting, operates music recording studios
Recording studio
A recording studio is a facility for sound recording and mixing. Ideally both the recording and monitoring spaces are specially designed by an acoustician to achieve optimum acoustic properties...
and duplicates video tapes. The offer was declared unconditional on 5 December 1985 at which date it had been accepted in respect of shares representing 94.2 per cent. Of the issued share capital.
Financials
1981-1987 Geographical AnalysisTurnover Profit>
1985 profit include £450,000 exceptional item largely due from an insurance claim for rental assets destroyed in a fire at Pinewood Studios
Pinewood Studios
Pinewood Studios is a major British film studio situated in Iver Heath, Buckinghamshire, approximately west of central London. The studios have played host to many productions over the years from huge blockbuster films to television shows to commercials to pop promos.The purchase of Shepperton...
,over their book value.
1981-1985 Class of Business Analysis
Turnover Profit Loss>
1986-1987 Class of Business Analysis
Turnover Profit>
Associated company figures are for Lee's investment income from Media Technology International PLC
Acquisition of Colortran
In June 1985 Lee announced that it had completed the takeover of Colortran, a film and television lighting equipment manufacturer with operations in BurbankBurbank, California
Burbank is a city in Los Angeles County in Southern California, United States, north of downtown Los Angeles. The estimated population in 2010 was 103,340....
California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
USA and Thetford
Thetford
Thetford is a market town and civil parish in the Breckland district of Norfolk, England. It is on the A11 road between Norwich and London, just south of Thetford Forest. The civil parish, covering an area of , has a population of 21,588.-History:...
England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
. In a deal reported to be worth around £3.7 million, Lee paid £850,000 in cash and the rest was to service Colortran’s existing debt finance. Lee bought 85 per cent. of Colortran whilst Ken Boyda Colortran’s UK chief executive retained a 15 per cent. stake, Lee later acquired this outstanding 15 per cent. in December 1985 in exchange for shares.
In contracts dated May 16, 1985, Lee acquired 85 per cent. of the issued share capital of Colortran Holdings Inc from its US parent company Forward Technology Industries Inc. for cash sums of $601,800 and £345,950. Lee also contracted through Colortran to buy 2.3 acres (9,307.8 m²) of land with office and factory buildings at Thetford Norfolk
Norfolk
Norfolk is a low-lying county in the East of England. It has borders with Lincolnshire to the west, Cambridgeshire to the west and southwest and Suffolk to the south. Its northern and eastern boundaries are the North Sea coast and to the north-west the county is bordered by The Wash. The county...
England for £460,000 cash.
The manufacturing business was renamed Lee Colortran and saw the 24000 sq ft (2,229.7 m²) factory at Thetford refurbished whilst Lee International’s 6.5 acres (26,304.6 m²) site at Kearsley
Kearsley
Kearsley is a town within the Metropolitan Borough of Bolton, in Greater Manchester, England. Historically within Lancashire, it lies about 7½ miles northwest of Manchester,5.5 miles south-west of Bury, and about 3¾ miles south of Bolton.It is bounded on the west by Walkden, the east by...
Manchester
Manchester
Manchester is a city and metropolitan borough in Greater Manchester, England. According to the Office for National Statistics, the 2010 mid-year population estimate for Manchester was 498,800. Manchester lies within one of the UK's largest metropolitan areas, the metropolitan county of Greater...
became the northern England manufacturing base for Lee Colortran where a 12000 sq ft (1,114.8 m²) factory also undertook research and development of new electronic lighting control equipment. In North America 136500 sq ft (12,681.3 m²) was leased for office space, factory and warehousing, split between two sites in Burbank California.
Acquisition of Humphries Holdings PLC
Lee announced in October 1985 that it had agreed a cash offer to acquire rental and services group Humphries Holdings PLC, valuing it at £2.5 million. The offer of 33.5 pence per ordinary share was accepted by majority shareholder BET plc, holding 75 per cent of Humphries issued share capitalIssued share capital
The issued share capital of a company is the total nominal value of the shares of a company which have been issued to shareholders and which remain outstanding . These shares, along with the share premium account, represent the capital invested by the shareholders in the company...
. Lee’s offer was a 20 per cent premium over Humphries recent mid market share price
Share price
A share price is the price of a single share of a number of saleable stocks of a company. Once the stock is purchased, the owner becomes a shareholder of the company that issued the share.-Behavior of share prices:...
of 28 pence. Humphries made an attributable loss of £2.46 million to the year ending March 1985 on turnover
Turnover
-Business:*Turnover is sometimes a synonym for revenue , especially in European and South African usage.Services sold by a company during a particular period of time....
of £14.22 million.
Operating under the Mole-Richardson
Mole-Richardson
Mole-Richardson, also known as Mole, is a stage lighting instrument and motion picture lighting manufacturing company based in Hollywood, California...
name Humphries ran two European film
Film
A film, also called a movie or motion picture, is a series of still or moving images. It is produced by recording photographic images with cameras, or by creating images using animation techniques or visual effects...
and television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
lighting rental houses located in France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
and Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
. The French subsidiary
Subsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
also manufactured low voltage lighting for architectural and display purposes, many of its low voltage lights being installed in shops; hotels; banks and numerous other buildings. Mole-Richardson had a showroom in Whitfield Street London selling their low voltage lights. Humphries had recently closed and sold off its film laboratory
Film laboratory
A film laboratory is a commercial service enterprise and technical facility for the film industry where specialists develop, print, and conform film material for classical film production and distribution which is based on film material, such as negative and positive, black and white and color, on...
interests however it retained a video
Video
Video is the technology of electronically capturing, recording, processing, storing, transmitting, and reconstructing a sequence of still images representing scenes in motion.- History :...
duplication operation based in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
. Humphries also ran CTS Recording Studios a sound and music recording studio based in Wembley
Wembley
Wembley is an area of northwest London, England, and part of the London Borough of Brent. It is home to the famous Wembley Stadium and Wembley Arena...
.
Two consequences of the Humphries takeover
Takeover
In business, a takeover is the purchase of one company by another . In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company.- Friendly takeovers :Before a bidder makes an offer for another...
were firstly to delay the imminent public flotation of Lee International PLC, allowing Lee time to prepare and publish its offer document to include the Humphries acquisition figures. Secondly the acquisition of Humphries brought about a significant change in the makeup of the Lee International board of directors
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
, bringing in John Davey
John Davey
John Philip Davey , is a former British Olympic swimmer. At the 1982 Commonwealth Games in Brisbane, Australia, he won bronze medals in both the 400 m freestyle and 400 m individual medley....
and Colin Wills as non executive positions of chairman and director respectively. The appointment of these two senior executives to board of Lee, who both had a long track record of working in executive roles for quoted companies, would significantly enhance the Lee boardroom.
Lee’s finance director David Mindel was quoted in the October 25th 1985 issue of Broadcast periodical commenting on the acquisition. “We had to choose between buying Humphries Holdings when the opportunity occurred or postponing our flotation plans, really, there was no choice, Humphries is too good an opportunity to pass up. Its figures will be included in Lee results when we go public next spring.”
Acquisition of Panavision
Lee International PLC announced on the 3rd September 1987 that it had made an offer of $100 million (£61 million) for PanavisionPanavision
Panavision is an American motion picture equipment company specializing in cameras and lenses, based in Woodland Hills, California. Formed by Robert Gottschalk as a small partnership to create anamorphic projection lenses during the widescreen boom in the 1950s, Panavision expanded its product...
, the Hollywood manufacturer and renter of motion picture cameras and lenses
Photographic lens
A camera lens is an optical lens or assembly of lenses used in conjunction with a camera body and mechanism to make images of objects either on photographic film or on other media capable of storing an image chemically or electronically.While in principle a simple convex lens will suffice, in...
.
At that time it was estimated Panavision had a stock of some 700 movie cameras only available for rental from Panavision offices or through agents. Panavision estimated that its cameras were used on 35 per cent of worldwide feature film
Feature film
In the film industry, a feature film is a film production made for initial distribution in theaters and being the main attraction of the screening, rather than a short film screened before it; a full length movie...
production. In 1986 it had a turnover of $29.07 million and made a pre–tax profit of $2.5 million.
Simultaneously, Lee’s management were organising a buyout
Buyout
A buyout, in finance, is an investment transaction by which the ownership equity of a company, or a majority share of the stock of the company is acquired. The acquiror thereby "buys out" control of the target company....
of Lee International PLC, worth £198 million to take the company private just 18 months after its £85 million floatation
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
in April 1986, which valued Lee’s shares at £1.80.
Lee International’s shareholders were offered £3.60 a share in cash or one ordinary share in a new holding company
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
called Westward Communications Ltd for every Lee share held. Lee’s shares rose sharply on the news gaining 68p to finish at £3.38 on the day. The Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
reported in October 1987, that virtually all the non-management shareholders in Lee International had accepted the cash offer of £3.60 accounting for 32.7 per cent of Lee shares.
Lee International PLC had 55,108,720 ordinary shares in issue as stated in their 1987 Annual Report, of this figure John Lee owned 14,102,892 and his brother Benny slightly more with 14,137,892. Lee’s financial director, David J Mindel owned 1,374,797 shares with other senior management holding a total of 824,318 Lee shares. This gave Lee’s management control over 30,438,901, just over 55 per cent of the voting shares
Voting shares
A voting share is a share of stock giving the stockholder the right to vote on matters of corporate policy and the composition of the members of the board of directors....
in the company.
The Westward buy-out was formulated after the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
voiced concern about Panavision’s short independent life, having only recently been bought by its management in 1985 from Warner Communications
Warner Communications
Warner Communications or Warner Communications, Inc. was established in 1971 when Kinney National Company spun off its non-entertainment assets, due to a financial scandal over its parking operations and changed its name....
, and its comparable size to Lee International, the purchase of the camera company would represent around 30 per cent of the two names joining forces.
Lee’s purchase of Panavision looked thwarted from the very beginning, instigated by the London Stock Exchange Lee’s management were forced into buying back stock that had sold for £1.80 in a stock market floatation in April 1986, only 18 months earlier and now was faced with the prospect of paying £3.60 for these shares facilitated by the new buy-out vehicle Westward Communications Ltd. You could argue that Lee was paying twice over for Panavision.
Westward’s purchase of the both Lee and Panavision would cost a staggering $340 million, this was almost twice the estimated assets of the combined group. Finance for the two deals was provided by Citicorp Industrial Credit and another $10 million from parties connected with Lee’s management.
Westward intended to seek a US listing for its shares within 18 months of the deal that was struck in September 1987 and a return to the London market would be considered too. It was estimated at the time that Westward would have a market value in the region of £400 million.
Lee was purchasing Panavision from Frederick W “Ted” Field’s Interscope Communications Inc. The purchase price of $100 million cash with Lee assuming Panavision’s $47 million debt was substantially higher than the $52.5 million Field paid Warner Communications
Warner Communications
Warner Communications or Warner Communications, Inc. was established in 1971 when Kinney National Company spun off its non-entertainment assets, due to a financial scandal over its parking operations and changed its name....
for the company back in 1984.
Lee’s takeover of Panavision was hit by two significant events that impacted heavily on their acquisition. Firstly, within eight weeks of the Panavision purchase world stock markets suffered what is now known as Black Monday
Black Monday
Black Monday is a term used to refer to certain events which occur on a Monday. It has been used in the following cases:* Black Monday, Dublin, 1209 – when a group of 500 recently arrived settlers from Bristol were massacred by warriors of the Gaelic O'Byrne clan...
, where stock markets crashed on October 19, 1987, throughout the world. The following global financial crisis put paid to plans for Westward Communications seeking a public listing on the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
within 18 months of the deal. Secondly, 1988 saw the Writers Guild of America
Writers Guild of America
The Writers Guild of America is a generic term referring to the joint efforts of two different US labor unions:* The Writers Guild of America, East , representing TV and film writers East of the Mississippi....
went on strike for close on 22 weeks, from March 7 through August 7. The strike affected the making of many American television series and to a lesser extent Hollywood movie production. Panavision’s revenue experienced a major downturn during this time, a report in the Los Angeles Times
Los Angeles Times
The Los Angeles Times is a daily newspaper published in Los Angeles, California, since 1881. It was the second-largest metropolitan newspaper in circulation in the United States in 2008 and the fourth most widely distributed newspaper in the country....
in August 1988 estimated Panavision sales had fallen 20 per cent that year primarily due to the five-month writers strike.
Financial Crisis
By early 1988, Lee International, with its heavy debt burden, had hit serious financial difficulties. It was in default on the $340 million loan, having insufficient cash to the meet interest payments. In August, 1988 a spokesman for Citicorp, which led a syndicate of 17 international banks to fund both Lee’s purchase of PanavisionPanavision
Panavision is an American motion picture equipment company specializing in cameras and lenses, based in Woodland Hills, California. Formed by Robert Gottschalk as a small partnership to create anamorphic projection lenses during the widescreen boom in the 1950s, Panavision expanded its product...
and buyout vehicle Westward Communications Ltd, announced that the Lee group of companies was indeed in crisis.
Further news emerged around this time that brothers John and Benny Lee, who founded the company in the early 1960s, had resigned as directors of the group’s parent company even though they remained majority shareholders.
Within weeks of these developments US based Warburg Pincus
Warburg Pincus
Warburg Pincus, LLC is an American private equity firm with offices in the United States, Europe, Brazil and Asia. It has been a private equity investor since 1966...
Capital LP, a private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
company, was approached by Citicorp to engage in restructuring Lee’s debt. Warburg stepped in investing $60 million in a new company Lee Panavision International Inc, which assumed Westward’s $340 million debt.
Under the deal, Lee Panavision International would acquire all Lee Group assets except for the UK lighting operation Lee Lighting Ltd. However, Lee Panavision International had an option to purchase Lee Lighting exercisable at any time until December 17, 1990, furthermore Lee Panavision entered into a management agreement of Lee Lighting.
In December 1988, Warburg Pincus appointed William C Scott as chairman, president and CEO of Lee Panavision International Inc. Scott finally succeeded in taking the Panavision Inc. public in 1996 and remained with Lee Panavision until his resignation in January 1999.