New King

In the highly competitive textile industry, there are few business secrets. But nobody was prepared for two surprises pulled last week by Burlington Mills Corp., biggest U.S. producer of synthetic textiles. Burlington first startled the industry by announcing that it was buying control of Pacific Mills (about seventh-ranking producer of cottons and woolens). Other companies wanted Pacific, and one, M. Lowenstein & Sons, was actively bidding for it. Burlington moved in, raised the bid. By laying out $24.6 million, Burlington, in a day and a half, picked up 494,500 of Pacific's 959,052 shares, last week got control of Pacific's $79 million in assets, 14 factories, 9,500 employees.

The next day, Burlington produced an even bigger surprise; it announced that it wanted to buy control of Goodall-Sanford, Inc. (Palm Beach suits, plastic-coated fabrics, etc.) in the open market. This came as a shock to J. P. Stevens & Co. (the family firm of Army Secretary Robert Stevens), which was also planning to buy Goodall-Sanford, even had its men taking inventory in the plants. But it was even more of a shock to Goodall-Sanford executives, who apparently had not been informed by Burlington of its plans.

Burlington offered to pay Goodall-Sanford stockholders $20 a share for their stock ($6.25 above the stock-market price) until it had bought 380,000 of the 556,062 common shares outstanding. There was little doubt that enough stockholders would sell to give Burlington control. Goodall's President Elmer L. Ward then announced that his family, which owns 30,000 shares, would sell to Burlington, thus indicating that there would be no attempt to fight the purchase. Burlington had a good buy in Goodall. The book value of the company's common stock is $41.59 a share, and by laying out $7,600,000, Burlington would get control of Goodall-Sanford, with its $49.1 million in assets, 14 factories and 7,000 employees.

To finance both deals, Burlington had some $50 million in cash and Government bonds in its till. By the two purchases, Burlington's sales (including those of the controlled companies) will be well above $400 million a year, thus putting it ahead of J. P. Stevens and making it the biggest textile manufacturer in the country. Burlington will, for the present, operate both Pacific and Goodall-Sanford under their own names.

The two quick deals came only three months after Burlington's hustling boss, J. Spencer Love, 58, had cried poor mouth and called on competitors to stop disastrous price wars. At the time, he even advocated cuts in production. But Love has since decided that the way to fight the textile slump is to have such a broad line of goods that he can compete with all comers.

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