FINANCE
W A L L STREET OF CHEMISTRY Victor Chemical's subsidiary, Diversey Corp., plans to clip apron strings, become separate firm; safe may permit more phosphorous expansion for parent n p H E Diversey Corp.. presently u sub*•• sidiary of Victor Chemical Works, will soon cut loose a n d operate as a separate entity upon completion of an offering of 143.000 shares of its common stock by F. Eherstadt & Co., I n c . T h e prospectus indicates that as a subsidiary of Victor. Diversey *s business consists essentially of t h e development of chemical specialties and their national distribution a n d sale. A.mong the approximately 100 chemical specialties may be counted cleaning compounds (accounting about 6 5 ' \ of dollar sales), bactericides ( 2 0 S of sales), insecticides, scale removers, oil absorbents, floor waxes, bakery pan and bottle washing compounds, filtration agents, and processed clay products. Most products are purchased in finished form. About 3 7 r r of sales, however, are represented by products which have been compounded and packaged in relatively simple operations at the company's Chicago and South Cate. Calif., plants. For these products, raw materials purchased include caustic, soda ash, /)-dichlorobcnxcne. sodium phosphates a n d silicates, fuller's earth, a n d various wetting agents. T w o important products, each comprising approximately 209S? of sales, are Relion. a cleaning compound p u r c h a s e d from D o w Chemical Co., and Diversol. a trisodium phosphate—dichlorohenzene bactericide bought from Victor. Some* idea of t h e extent of diversification may be gained from a breakdown of 1949 sales by industry classifications: Dairv and dairv products Beverage Baking Brewing Canning Total food industries Maintenance and Institutional Metal cleaning Enoz products Miscellaneous Total
51 .'M 11.2 8.2 6.9 2.6 80.2^ 5.6 4.8 2.9 6.5 100.0'',
Upon completion of the financing. Diversey will b e capitalized as follows: short-term 2.59r note of $200,000; 3 . 9 2 ' ^ promissory note of S i million; and 220,000 shares of common stock outstanding, of which 77,000 shares ( 3 5 r ' , ) will be held or controlled by directors and officers of the company. Net profit for the nine months ended Sept. 30 amounted t o $341,046, or $1.55 on t b e indicated number of shares to b e outstanding. Sales were $6,508,239 for t h e same period, somewhat a h e a d of full year sales of $8,104,970 for 1949. Earnings in 1949 were $329,993. Based on the price at which Victor is selling its holding to t h e underwriter, t h e new Diversey Corp. com-
4394
mon shares should sell at about $10 per share. On this basis, the present intention of t h e hoard of directors t o declare a quarterly d i v i d e n d of 20 cents a share in January 1951 w o u l d indicate b y extrapolation a yield of 8%. T h e indicated price-earnings ratio w o u l d be a b o u t 5 to 1. Diversey *s competitors, according to the prospectus, arc J. B. F o r d division of W y a n d o t t e Chemicals Corp., Solvay Sales Corp., Diamond Alkali Co., a n d Oak it c Products. Inc. Victor's action in divesting itself of Diversey may b e construed in several ways. Possibly. Diversey w a s competing with other customers of Victor, but p e r h a p s more to the point is t h e fact that t h e $2,186,219 received by Victor in t h e sale of its interest will permit further expansion in electric furnace capacity for phosphorus and fuller development ot phosphate chemicals for detergents and insecticides.
Pennsalt Files Additional Common Stock Issue w i t h SEC Pennsylvania Salt Mfg. Co. has announced it has filed a registration statement with the Securities a n d E x c h a n g e Commission relating to t h e possible offering to present share owners of rights to subscribe for 124,879 shares of additional common stock. T h e additional shares w o u l d b e offered at t h e rate of one such share for each seven held on t h e record date, D e c . 6. Sale of the additional shares would bring to 9 9 9 , 0 3 5 t h e n u m b e r outstanding out of 1.5 million shares of c o m m o n stock authorized. T h e r e a r e in addition 150,000 shares of preferred stock authorized but none now outstanding. Net proceeds from the sale of the additional common stock will he a d d e d to the cash funds of the company a n d will b e used for such corporate purposes as the board of directors may d e t e r m i n e , including t h e improvement a n d expansion of plant facilities. Projects of this nature which h a v e b e e n authorized by the b o a r d a n d on which work is now in progress are currently expected to cost approximately $4.2 million of which about $ 3 million is for expansion and improvement of production facilities for chlorine a n d caustic soda at W y a n d o t t e , Mich., Portland, Ore., and Tacoma, W a s h . A n u m b e r of other projects are being evaluated by t h e m a n a g e ment, b u t no final decision h a s b e e n reached w i t h r e g a r d to t h e m . In the registration statement Pennsalt reported t h a t in t h e p a s t five years company sales h a v e increased from about $24.5 million in 1945 to about $ 3 3 million in 1949.
CHEMICAL
O n October 24 Pennsalt reported that net profits after taxes for t h e first n i n e months of 1950 w e r e $3,136,601 a n d that sales for t h e same period totaled $29.617,541. A portion of t h e advance in sales, said t h e statement, is the result of t h e compan> Ts policy to convert its basic p r o d u c t s into chemical specialties having a sales value higher than the materials from which the> are m a d e . Such specialties include insecticides, metal cleaners, a n d l a u n d r y detergents. At t h e same time sales of basic chemicals—chlorine, caustic soda, sodium chlorate, sal a m m o n i a c , and h y d r o g e n peroxide have continued to increase.
I n t e r n a t i o n a l Minerals to Increase Common Shares Stockholders of International Minerals & Chemical C o r p . at a special m e e t i n g on Nov. 27 a p p r o v e d recommendations by t h e hoard of directors to increase* the n u m b e r of authorized shares of the corporation's common stock from 800,000 to 2 million shares, according to a statement b y Louis W a r t , president of the corporation. In addition, t h e stockholders a u t h o r i / e d the board of directors to issue a n d sell 200,470 shares of common stock of t h e corporation consisting of 200,000 shares authorized by a proposed a m e n d m e n t , and 470 shares previously authorized a n d unissued. T h e stockholders also authorized t h e board, after t h e sale of 200,470 shares of common stock, to declare a stock d i v i d e n d of one share of common stock for each share of common stock then o u t s t a n d i n g . Mr. W a r e h a d previously a n n o u n c e d , following the regular meeting of stockholders on Oct. 26, t h a t the b o a r d of directors was considering a plan of financing which would contemplate t h e sale of 200,470 shares of common stock to u n d e r writers for distribution to the p u b l i c , a n d that the net proceeds from the sale of t h e common stock w o u l d b e a d d e d to t h e cash funds of t h e corporation and b e available as increased working capital and for other general corporate purposes, including capital expenditures for new plant facilities, a n d for expansions, additions, a n d improvements to existing plants. Mr. W a r e stated that a special meeting of the board of directors will b e held in t h e near future to fix t h e price a t w h i c h t h e shares of n e w common stock are to b e offered, to a p p r o v e and authorize execution of the u n d e r w r i t i n g a g r e e m e n t , to declare a lOO^r stock d i v i d e n d subject to completion of sale of the 200,470 shares of common stock to t h e u n d e r w r i t e r s , and to declare a cash dividend p a y a b l e to stockholders of record on D e c . 20, 1950.
Closing M a r k e t Prices At t h e close of business on D e c . 4 , t h e stocks m e n t i o n e d a b o v e w e r e q u o t e d as follows: Pennsalt 58 International Minerals 51' -
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