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Schlegel Sells Pavestone to Okies

You might recall that Bob Schlegel thought he’d sold his Pavestone for $540 million until the FTC kiboshed the deal at the last moment. Ouch. Well, now he’s finally sold his company, which makes concrete landscaping stones and suchlike. Or he has sold an equal interest in it (I’m assuming 50 percent). The buyer? The Oklahoma Publishing Co., publisher of the Oklahoman. Details of the deal weren’t disclosed. Here is my question: Schlegel isn’t exactly what you’d call publicity shy. Why is FrontBurner the first outlet in Dallas to mention this (as far as I can tell)?

23 comments on “Schlegel Sells Pavestone to Okies

  1. For more local ties, Ok Pub is part of the Gaylor Empire, which also owns the Gaylord Hotel and Stonebriar Mall in Frisco (Gaylord Pkwy).

  2. “Publicity shy?” How many publicists do the Schlegels have on staff for just their kids’ misadventures?

  3. February 6, 2009
    “Grapevine-based Pavestone Co. LP has dropped plans to merge with an Ireland-based competitor after the Federal Trade Commission filed a lawsuit in an attempt to block the $540 million union.”

    At the time of this failed deal to sell Pavestone, the company had debt on the order of $200-$240 million: meaning that the Schlegels would have walked with roughly $300 million had the deal been completed. (Did Old Castle ever dodge a bullet or what?)

    Word is that EBITDA for Pavestone’s 2009 had dropped by 40%-45% over 2008 and with Bob Schlegel shopping the firm last year at roughly $400 million (but with no takers).

    With $200+ million in debt, $40+ in improving EBITDA but no superior transactional alternatives, I’ll speculate that the Gaylords bought their co-equal interest at no more than $110-$140 million.

    Which amount (absent a lot of real estate, some available at outrageously overinflated sale prices) tells you essentially the zip code of what the Schlegel family is worth.

  4. @ Whyisthisbeingreportednow?

    Good question. Tim?

    Interesting that I can’t find any other reportage of this deal anywhere, other than directly or indirectly through the Gaylord-owned Daily Oklahoman.

  5. There seems to be other interesting stuff here.

    Schlegel Sports, which once owned all of the Tacoma Raniers minor league baseball team, the Iowa Stars minor league and the Texas Tornado junior hockey team, is now “Strategic Sports”, owning only the Tacoma Raniers.

    http://strategic-sports.com/strategicsports/staff/

    And what happened to Schlegel Woy Management?

    http://newsblaze.com/story/2009121610291500001.bw/topstory.html

    And there’s a noteworthy penthouse condo for sale as well.

    http://www.housingwatch.com/2010/03/19/i-want-this-his-and-hers-dallas-penthouse-condo-for-11-75/

    I see a trend here.

  6. :”Which amount (absent a lot of real estate, some available at outrageously overinflated sale prices) tells you essentially the zip code of what the Schlegel family is worth.”

    What does that mean?

  7. zip code = general area, gives you an idea. In other words, Which amount (absent a lot of real estate, some available at outrageously overinflated sale prices) gives you the general idea of what the Schlegel family is worth.

  8. If they got 110 – 140 million, that wasn’t all in their pocket if they bank was owed 240 million or whatever the original article said.

  9. Clicking on that penthouse condo sale link above made me want to vomit. Surely I can’t be the only person who finds the whole Schlegel family nauseating?

  10. @Grover,

    They are new money. If you read the backstory of their family, living out of a van with little kids trying to manage a string of nursing homes…then you know why they spent so much money in the last few years, so fast. Easy come, easy go.

    Impressive that the penthouse at the W is up for sale.

    Note for the Noveau Riche: Just live at The Mansion On Turtle Creek. Its cheaper in the end when you need to walk away.

  11. @ Zip code remark

    He means they got $110-140 mil AFTER paying off the debt. Try to follow along a little closer, please. Daddy Schlegel sells company for $400 mil, pays off $240 mil in debt, pays a few mil to the lawyers, pays off Uncle Sam and walks with $110-140 mil (depending on how good said lawyers are.)

  12. Look up Iowa Chops, that was the hockey team.
    in Des Moines
    I know for a fact they did not net, or pocket 100 mil, a lot less than that

  13. @ zip it remark
    With $200+ million in debt, $40+ in improving EBITDA but no superior transactional alternatives, I’ll speculate that the Gaylords bought their co-equal interest at no more than $110-$140 million.

    So if the co interest (50%) is 110-140, that’d be 220-280 total value, not 400 which – 240 would means he would ‘walk’ with (20) to +20. But since it’s a co interest divide that by 2 and he walks with 0-10.

  14. If I had the Schlegal’s money I would burn mine.

    I am sure they are going to be just fine, maybe not as fine, but fine.

  15. On Kim Schlegal’s blog she writes about the charm of sending handwritten notes then recomends a company that will handwrite the notes for the customer. Whats the purpose of her sincerity if someone else does it all for her. The family is Dallas’ version of the Kardashians. So tacky.

  16. @ Read Clearly

    My math assumes that OPUBCO acquired equity directly from Pavestone, which then used the equity purchase funds to pay down debt.

    It seems almost certain that the Schlegels did not get to take a significant portion of such cash investment. So the value of the Schlegel’s paper holdings in Pavestone are inevitably worth what OPUBCO paid for such.

    It’s anyone’s guess as to the enterprise value of Pavestone back in early 2010, but I doubt that it was worth $400 million: Schlegel would have taken it if he could.

    But if Pavestone had an enterprise value of $380 million as a result of the OPUBCO transaction and a debt level of $200 million, the resultant equity value of Pavestone would be $180 million: and meaning that OPUBCO paid $90 million for its 50% stake.

  17. @ Zip it zip code boy

    And I think that you may need to follow your own advice, man. That math is wrong.

  18. Recently departed Pavestone logistics management personnel insist that they are preparing to dump their entire truck fleet and outsource everything to Ryder Logistics starting with a “pilot program” at the Cincinnati, OH plant. Has anyone else heard this? OPUBCO was a trucking pioneer in OK, so why are they moving out of vertical integration now?