Ronald Perelman: Bright Mind in Buying and Selling Companies

Ronald Perelman is an American entrepreneur and investor. With the help of his company MacAndrews & Forbes Holdings Inc., Perelman was able to acquire interests in various companies that encompass a wide range of industries such as banks, cars, camping supplies, cigars, comic book publishing, groceries, jewelries, licorice, makeup, photography, security and lottery. He is listed as the 26th wealthiest American and the world’s 69th wealthiest man. His fortunes are estimated at $14 billion.

Perelman was born on January 1, 1943 in Greensboro, North Carolina. As a boy, Perelman showed signs of business successes. Together with his father and brother, the Perelmans had complete control of the American Paper Products Corporation. His father taught him the fundamentals of business. At eleven, Perelman was a regular audience at the board meetings of his father’s companies.

In 1964, Perelman earned his degree in business at the Wharton School of the University of Pennsylvania. While he was a freshman at Wharton, Perelman had his first major business deal. At the advice of his father, Perelman acquired the interests of Esslinger Brewery for $800,000. It was reported that he sold the company for $1 million profit three years later. This became the business strategy of Perelman throughout his business career: acquire a company, sell off unprofitable segments to generate profits and reduce debts, operate the company’s core business, and sell it for cash flow.

In spite of his father’s influence, Perelman did not have a good relationship with him. In fact, their animosity began at Belmont Iron Works (now Belmont Industries) when he was just a boy. Perelman was the vice president for twelve years. Since his father did not intend to step down from the company, Perelman resigned in 1978 and moved to New York.

On his own, Perelman had his first business deal as an independent investor in 1978 after he acquired Cohen-Hatfield Jewelers. Perelman recognized that the company was mismanaged and purchased the company for $1.9 million. Perelman closed and sold all the retail stores and concentrated on wholesaling and earned the company $15 million.

Next, Perelman targeted MacAndrews & Forbes, a company his father failed to acquire ten years earlier. Although the licorice and chocolate company tried to prevent Perelman from acquiring the company through lawsuits, Perelman prevailed. As chairman and CEO, Perelman turned MacAndrews & Forbes into the holding company of many of his interests in diversified industries. Oftentimes, MacAndrews & Forbes would invest in companies with recognized brands, solid market positions and potential for growth.