Emery-Distillers merger a surprise
ducted under some type of safety procedures. • Conversion of existing labora tories to conduct P3, or moderate risk, Percent Surprises continue to crop up in recombinant DNA research would 40 mergers in the U.S. chemical indusinvolve equipment costs of about try. One is the slated acquisition of $5000 for every three persons in Emery Industries by National Disvolved in the research. P4, or high 30 tillers & Chemical Corp. (C&EN, risk, facilities probably number fewer •^Bi^wyi Nov. 21, page 12). than 30 in the U.S. right now. Con The fact of an Emery takeover is struction of each new facility of this not surprising, since three stocktype is estimated to cost $750,000. 20 holders and Girard Bank of PhilaThe EIS also contains a study of delphia had filed papers with the the effectiveness of the physical con iiiiii 111 Securities & Exchange Commission tainment procedures required by the III indicating that they were seeking 11111111 l l l l l l l l l l l JUL l l l l l l l l guidelines as they have been in use at 10 proposals for such a takeover (C&EN, various times in laboratories working liieiBiii eiiiSB β ϋ ^ ^ ^ ^ ^ ^ β ^ ^ ^ ^ ^ ^ β WÊÊÊËÊÊÊ^ÈÊÊÊKÊ Aug. 15, page 5). Together the stockwith infectious diseases at Ft. Deholders and the bank represented trick, Md. This study finds that re about 14% of the outstanding Emery search done at the equivalent of PI 0 m^mi ι dp mmmmm 1976 1972 1973 1974 1975 stock. containment, the lowest level speci a Profits from operations before taxes and other charges What is surprising, however, is that fied by the guidelines, led to 35 labo as percentage of sales, b Emery's fiscal year ends on March 31. Source: Company data it was National Distillers making the ratory-acquired infections per million offer. There seems to be little in man-hours of work. The level was common between the two companies. analyst who specializes in chemical reduced to nine infections at the P2 Emery is a specialty chemical pro- companies calls "rich for that stock." level, two at P3, and one at P4. The ducer, manufacturing primarily fatty Although $25 per share may not seem single infection that occurred at a P4 acids. National Distillers makes much of a premium over the $20- facility was caused by an accidental mostly plastics and resins. As one per-share stock price prior to the needle puncture through protective source close to Emery says, "There is offer, it must be remembered that the gloves. At Ft. Detrick there has never absolutely no fit between the two stock price has almost doubled in the been a known case of infection in companies." However, the deal may three months since the stockholders anyone who was not associated in represent a move by Distillers to filed their statement with SEC. some way with the lab, suggesting hedge its petrochemical-based operEmery had earnings in fiscal 1977, that the physical containment mea ations with a business based largely ending March 31, of $6.8 million on sures do keep agents from escaping on nonoil and nonnatural gas raw sales of $183.8 million. In the com into the environment. D materials. pany's second fiscal quarter, ending Emery has had a tough time of it Sept. 30 this year, earnings of $3.2 lately. Profit margins only recently million were recorded on sales of White House moves have begun to pick up after a devas- $51.9 million. The earnings figure is tating fourth quarter in the compa- up 57% from the $2.0 million earned to simplify regulations ny's last fiscal year. Most of the in the comparable quarter of 1976. trouble in the quarter was brought on Sales for the quarter were up 21% to Another campaign is under way to by a strike at the company's largest $51.5 million from the second fiscal simplify the federal regulatory pro cess. This time impetus for the drive manufacturing facility, in Cincin- quarter in 1976. nati. At National Distillers, chemical comes directly from the White House. The $25-per-share price that will sales amounted to 33% of the com President Carter has issued a pro be paid by National Distillers also is pany's total sales last year. However, posed executive order aimed, the something of a surprise. It is about 15 its profits from chemical operations White House says, at simplifying and times Emery's current annual earn- made up a whopping 74.9% of total improving government regulations. The proposed order will affect the ings—a price that one Wall Street operating profits for the year. D rule-making activities of all federal departments and agencies, including the Department of Energy, the Oc NIH evaluates impact of DNA research cupational Safety & Health Admin The National Institutes of Health has port for their viewpoints in this doc istration, and the Environmental issued the final environmental impact ument. The statement does, however, Protection Agency. But it does not statement (EIS) on its guidelines for contain an array of information on apply, at least for now, to indepen recombinant DNA research. Like the what is known about the impact of dent regulatory commissions such as draft statement issued in September NIH's recombinant DNA research the Federal Trade Commission and 1976, this statement calls the risk in resolutions. For instance: the Interstate Commerce Commis volved in conducting recombinant • All recombinant DNA research sion, which are under direct Con DNA research in accordance with the known to NIH to be occurring in the gressional control. Under the new NIH guidelines "extremely small U.S. is being done in compliance with policy, regulations are expected to be and at present still hypothetical, but the NIH guidelines. as simple and clear as possible, something "which cannot be ig • Significant research is taking achieve legislative goals effectively nored." place outside the U.S. NIH estimates and efficiently, and not impose un The statement itself seems unlikely this work at about 150 recombinant necessary burdens on the economy. to have any great effect on the out DNA projects under way in Europe To achieve these objectives, Pres come of the debate. Both proponents and 20 to 25 more in Canada, Aus ident Carter is requiring federal and critics of continued recombinant tralia, Japan, and the Soviet Union. agencies to implement a number of DNA research are likely to find sup All of these projects are being con new procedures. First is publication
Profit margins at Distillers far outrank Emery's 3
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Nov. 28, 1977 C&EN 5
