If doing big deals makes businessmen happy, Donald P. Kelly must be delerious with joy.

The Chicago executive, who as chairman of Chicago-based Esmark Inc. developed an enviable reputation as a successful corporate trader, has been at the helm of three megadeals -- worth about $4.7 billion -- in just over a year.

The smallest deal, Esmark's $990 million purchase of Norton Simon Inc., another consumer products conglomerate, was closed in September 1983. Before Esmark had time to digest Norton Simon, Kelly and some of his associates attempted to buy Esmark and take the company private. That prompted Beatrice Companies Inc., another Chicago consumer products firm, to mount a successful takeover of Esmark in August, for $2.7 billion.

Kelly, who was not offered an executive position with Beatrice, displayed his sense of humor at a farewell party he threw in New York for securities analysts and investment bankers. He displayed his new business card that read: "Retired. No business. No worries. No plans. No problems. No money. No prospects."

The man with "no prospects" promptly formed an investment firm in August with former Esmark vice chairman Roger T. Briggs. And only a few weeks after they opened their doors, Kelly, Briggs & Associates Inc. announced it was leading a group of investors, along with Oppenheimer Strategic Investments Inc., in buying Chicago conglomerate Northwest Industries Inc. for more than $1 billion. The deal has the blessing of Northwest's directors and is expected to be closed in January after stockholders vote their approval.

How does Kelly do it? And does he plan to go after other billion-dollar public companies that he views as undervalued, profit-making opportunities?

"Let's say," Kelly said with a grin, "that if a beautiful girl comes along, I'm going to have an affair. But I'm not going to stand around at a Boy Scout camp waiting. We will use the contacts we've developed over the years with the Street [Wall Street]. Just last night I got a phone call about an $800 million deal."

Kelly's success at Esmark revolved around his ability to buy and sell companies to maximize value, in much the same way that an individual investor might aggressively manage an investment portfolio. At Esmark, Kelly directed a lean corporate staff that acted as a holding company for a diverse group of subsidiaries including Hunt-Wesson foods, Avis Rental Cars, Max Factor cosmetics, STP oil and Playtex.

Executives at the subsidiaries had autonomy to manage the operations, and Kelly said he made sure the financial goals they were expected to meet reflected industry standards and realistic targets based on historical operating results, rather than a single set of corporate goals for all the diverse businesses. "You can't run a conglomerate and use the same measure for oil and food and insurance businesses," Kelly said.

And if economic conditions pushed the chance for big profits in an industry beyond the reach of subsidiary managers, Kelly said he did not waste time trying to find ways to motivate managers to achieve the impossible. Instead, he employed a simpler technique: He sold the business.

As chairman of Esmark, Kelly was involved in buying and selling about 90 companies in a decade. The knowledge he gained and the contacts he made handling so many deals are invaluable now in his role as a private investor. They enabled him to get about $800 million in bank financing and $200 million in private investments to buy Northwest Industries.

Those who have profited handsomely from Kelly's merger and acquisition activities in the last few years are eager to give him whatever support he needs, as are those who have watched him enviously from the sidelines. Kelly said he has had to turn away some investors interested in the Northwest Industries deal, promising them that they will have future opportunities to participate in his deals.

The only criterion Kelly has established for future acquisitions is that they must be big. "They have to be big enough [for me] to afford to make mistakes," Kelly said. "I've got to be able to dance a little."

Kelly's strength is in his constant drive to maximize shareholder value, whatever it takes, and in the focus he brings to complex situations. "I liquidated Esmark in my mind every third Monday," he said, implying that he would have sold the company's assets and disbanded its corporate structure if that would have maximized the value of Esmark stock.

Said Kelly: "One Esmark director told me that just one time he would like to come to an Esmark board meeting and not be surprised by a new proposal of mine."

Once the Northwest Industries deal closes, Kelly will review the company's subsidiaries to decide which to keep and which to sell. He already has decided to keep Union Underwear Co., a profitable subsidiary that makes Fruit of the Loom brand products -- and makes the Northwest deal worth doing from a financial point of view -- and likely will sell Velsicol Chemical Corp., the troubled agricultural chemical subsidiary.

Northwest's other subsidiaries include Acme Boot Company, the world's largest manufacturer of cowboy boots; General Battery Corp., an industrial and automotive battery maker; NWT Natural Resources Co., an oil and gas exploration company hit hard by weakness in the oil industry; Universal Manufacturing Corp., a manufacturer of small transformers used in lighting fixtures, and Lone Star Steel Co., a leading producer of oil service products, including the casing and tubing used in oil and gas wells, that will be spun off to become a publicly traded New York Stock Exchange company.

Finally, there are 4.8 million shares of the Pogo Producing Co., worth about $96 million, that probably will be sold by Kelly to reduce bank borrowing to finance the Northwest deal. Kelly thinks it will take about eight years to pay back the $800 million borrowed from banks, and he plans to reduce the debt by using cash flow from the Northwest operations he keeps and proceeds from the ones he sells.

The Northwest Industries deal came about after Northwest Chairman Ben W. Heineman contacted Kelly. Heineman, nearing retirement, had been searching for ways to maximize the company's value for shareholders, and a friendly deal with a group led by Kelly provided him with that opportunity. The deal has increased the price of Northwest shares nearly 50 percent, from a 12-month low of 40 5/8 to Friday's close of 58 5/8.

The current price of Northwest stock reflects Kelly's $50-a-share offer to acquire the company, plus the expected value of one share of Lone Star Steel Co. common stock, since Northwest stockholders will be given one share of Lone Star Steel for each share of Northwest Industries they own when Lone Star is spun off to the public.

"The Northwest Industries deal is terribly opportunistic, and, frankly, if we had gone out and looked aggressively for something to do, who knows if we could have found anything like this?" Kelly said. "How lucky can you be?

"The certainty is that any company Donald Kelly is associated with isn't the same 12 months later," he said. "Wherever we are today, we will be in quite a different place one year from now. We will not stand still."

Such statements have made many Northwest Industry executives nervous because of the uncertainty about who will ultimately own the operations they manage; some of them have approached Kelly and asked to be given the chance to buy the subsidiaries. Kelly has visited each of the companies to reassure executives that they will be treated fairly, but he makes no promises about who their future owners might be. He promises them they will be compensated for cooperating, if he decides to sell the businesses they manage, and that they will be given the opportunity to bid for the businesses.

He did say that to "make this deal work," it is not necessary to sell off all the subsidiaries, except Union Underwear, as some have speculated. Rather, he said the numbers "work" assuming a continuation of operations.

Kelly surrounds himself with investment banker and lawyer advisers, but he noted he has little patience for their negotiating techniques at times: "I have a short attention span, and I don't like to spend two days talking about $10 million one way or another and then gloss over $300 million. I bring focus."

Kelly, 62, believes there are other opportunities to make big profits through buyouts such as Northwest Industries. As he begins a new life as one of corporate America's most powerful private investors and dealmakers -- and with a track record of financial success to back him up -- Kelly remains hungry to do more megadeals.

"I am just not capable of going and sitting around at the old fishing hole," he said. ". . . There is the excitement of the chase, and the impact you can have on the future of a company. And then there are the rewards for yourself and investors."