Bell & Howell Co. may not emerge intact from its planned acquisition by an investor group, which disclosed Monday it is considering selling ”one or more” of the company`s businesses.
The group, led by some Bell & Howell executives and Texas financier Robert M. Bass, didn`t identify what lines might be sold, except to say they would be among those considered ”non-core” businesses.
The group said proceeds from any sales would be used to help reduce indebtedness from the $64-a-share, or $674.6 million, purchase of Bell & Howell.
The disclosure, contained in a filing by the group with the Securities and Exchange Commission, comes as no surprise.
Since the merger agreement was announced last month, there has been speculation that some Bell & Howell assets might have to be sold.
Skokie-based Bell & Howell describes itself as a publishing and information services company, but doesn`t identify which of its operations are considered ”core.”
Kenneth T. Berents, an analyst with Butcher & Singer Inc. in Philadelphia, said likely candidates for divestiture are assets within two groups: information storage and retrieval and document-mail processing.
He estimated the information storage and retrieval business might be worth about $100 million, although its value would depend on how much, if any, of the division`s real estate might be offered. The division produces document management equipment and warehouses documents.
The division also includes University Microfilms, a republisher of newspapers and other publications on microfilms and computerized databases. University Microfilms might be considered a ”core” Bell & Howell asset.
For the first nine months of 1987, the information storage division had pretax operating income of $40 million on revenues of $158.8 million.
The document-mail processing division, which produces systems for high-speed processing and sorting, had pretax income of $20.4 million on revenues of $144.9 million in the first nine months of 1987.
Berents estimated that the document-mail processing division might fetch at least $250 million.
He speculated that the division would make a good fit for a company such as Pitney Bowes Inc., the Stamford, Conn.-based maker of postage meters and mailing systems.
Berents said he believed the Bass group would part reluctantly with the document-mail processing business, which is a good generator of cash.
He said the group might instead consider selling Bell & Howell`s small marketing services company and its interest in a videocassette duplication venture.
