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Commentary: Let's welcome Hilbert back

November 19, 2007

You gotta love Steve Hilbert. He conceived of an idea and had the strength and focus to achieve an extraordinary result that he sustained over a number of years. ... He will undoubtedly return to the grand game of entrepreneurship. If given the opportunity, I would be inclined to invest in his next venture.

-July 10, 2000

I penned the above prediction in this column on the anointment of Gary Wendt as CEO and savior of Conseco Inc. After Stephen Hilbert resigned that post in April 2000, an interim CEO was appointed. The subsequent election of Wendt proved to be the beginning of an expensive adventure into oblivion. I had advocated that returning the reins to Hilbert would have been a better choice on the basis of his performance up until the time of the Green Tree debacle. Hey, he could have done no worse than Wendt and his successors.

Before crowing over my prediction that Hilbert would once again be a player on the entrepreneurial stage, let me confide that this was an easy call. Hilbert, once one of the highest-paid public corporate executives in America, is a bright, creative businessman with a young wife to support. That's a dynamic combination.

This ghost of business past chose Halloween to announce that his private-equity firm, MH Equity, provided a $200 million financing package to Centaur Inc., the owner of "racino" projects in Anderson and the Pittsburgh area. Hilbert and Centaur owner Rod Ratcliff are old friends. They were partners in one of the first casinos in Indiana, the Lawrenceburg riverboat. The money will provide funds necessary for general improvements, including 2,000 additional slot machines at the horse track in Indiana.

Horse racing and slots have been a passion of this flamboyant entrepreneur, who fielded horses in the Kentucky Derby (Parade Ground and Stephen Got Even in 1998 and 1999, respectively) and who, in addition to his Lawrenceburg investment, had a real estate partnership with Donald Trump, also a casino operator.

MH Equity, established in 2003, is controlled by Hilbert and bankrolled in part by his friend John Menard, the home-improvement-store billionaire. It is one of the largest private-equity firms in Indiana. Its first investment was a 9-percent stake in ORBCOMM, a global satellite communication company. That was followed by the acquisition of United Marketing Group in Chicago, a direct marketer of affinity merchandise orders and membership-based services.

In August 2006, MH Equity entered the indoor tanning industry with the purchase of Sunshine Holdings, the umbrella for ETS Inc., Australian Gold and Helios, from Indianapolis residents Trevor and Edna Gray. In not much more time than it takes to get a good indoor tan, Hilbert and his team acquired two top competitors. Today, New Sunshine LLC controls 80 percent of the indoor suntanlotion market. Hilbert used the same tactics he employed at Conseco to roll up insurance and finance companies-different product, same MO.

The Hilbert comeback was exacerbated by the relentless efforts of Conseco to collect on a judgment arising over the tab run up by Hilbert in an ill-fated program for the purchase of Conseco stock in the late 1990s. Both sides engaged in a debilitating tilt in the courts and in the media.

It is important to note that Hilbert did not enrich himself while his corporate empire collapsed like other executives in the news did, and that a number of Hilbert's charitable commitments were only partially funded when his travails began. It was probably a sacrifice to recognize and fulfill these responsibilities amid the uncertainty of his financial position. All accounts were paid in full. Hilbert escaped the Conseco imbroglio last December pursuant to a secret settlement.

Indianapolis should be delighted and proud of the return to success and prominence of this busy executive who created wealth and jobs for Hoosiers and who, with his wife, Tomisue, shared much of his personal wealth over a decade ago. I am pleased to point out that my prediction of July 10, 2000, has been fulfilled.



Maurer is a shareholder in IBJ Corp., which owns Indianapolis Business Journal. To comment on this column, send e-mail to mmaurer@ibj.com.
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