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Thomas H. Lee Co. didn't get much attention when it bought United Industries in January. But anyone familiar with Lee's penchant for building or reversing the fortunes of brands saw in it a good omen for United's home and garden products and bad news for competitors.

Over the past 12 years, Lee has bought dozens of solid but undermarketed companies and brands, infused new management and capital, then reaped big gains by selling them off again -- averaging annual returns of 101% through last June.

Those gains came not from high-tech investments or high-growth industries, but from decidedly unsexy consumer brands such as Ray-O-Vac, Playtex and Mr. Coffee, along with the trendier Snapple beverages and GNC stores.

"Tom Lee is clearly the Midas man of all the venture capitalists," said Burt Flickinger, a consultant with Reach Marketing.


Managers recruited to Lee Co.'s companies generally are committed to marketing, unlike some of the consolidators of orphan brands, such as International Home Foods, which relies more on efficiency moves, Mr. Flickinger said.

Lee may be best known for buying Snapple in 1992, taking it public, then selling it to Quaker Oats Co. at a huge profit within two years. Under Lee's watch, pitchwoman Wendy Kaufman became a Snapple icon in advertising from Kirshenbaum Bond & Partners, New York.

Under Quaker, however, Ms. Kaufman got her walking papers and Snapple became a legendary boondoggle, unloaded three years later to Triarc Beverages for $300 million, $1.1 billion less than Quaker paid for the company.


More indicative of Lee's track record -- and United's future -- may be the turnaround of Rayovac Corp., acquired by Lee in 1995 and taken public in '97.

"Three or four years ago, people wrote Rayovac off, saying Duracell and Energizer were going to rule the world and there was no role for branded batteries other than private brands," Mr. Flickinger said.

"But through great management, Rayovac has been able not only to be the leader in [manufacturing] private-branded but also to rebuild its branded business," he said.

Rayovac switched ad agencies from Foote, Cone & Belding, Chicago, to Young & Rubicam, Chicago, and redeployed pitchman Michael Jordan to its core alkaline business and away from a losing gambit in rechargeable batteries.

Its share of the $2 billion battery category rose from around 10% in 1997 to 14.7% for the 12 weeks ended March 13, according to ACNielsen Corp. figures cited by Rayovac. Sales for the first quarter of 1999 were up 16% from a year ago, to $111 million.


Scott Schoen, a managing director of Lee who helped put together the Rayovac and United deals and now serves on both companies' boards, said United will be looking at complementary acquisitions and increased marketing support to build business.

Unlike Rayovac, United was already on the upswing when Lee entered the scene.

In pest-control chemicals, sales of United's Spectracide, Cutter and Hot Shot brands were up 20% to $102 million for the 52 weeks ended Feb. 28, according to Information Resources Inc.

Those gains came with only $5 million in measured media support via D'Arcy Masius Benton & Bowles, St. Louis, in 1998, almost all of it behind the launch of Spectracide Terminate, a termite-prevention product, according to Competitive Media Reporting.

"This is an amazing company that very few people know about, and they're going to be finding out about us real soon," said Bob Rubin, senior VP-marketing at United, adding that media support will rise under new ownership.


Despite Lee's successes with other brands, however, United faces an uphill battle against S.C. Johnson & Son, predicted Ken Harris, a partner with consultancy Cannondale Associates.

"I think S.C. Johnson is one of the smartest marketers in the U.S.," Mr. Harris said. "Plus it's a private company. . . . If they decided tomorrow to defend

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