W. R. Grace and Company (NYSE: GRA) is a Columbia, Maryland, United States based chemical conglomerate.
The company has two main divisions, Davison Chemicals and Performance Chemicals. The Davison unit makes chemical catalysts, refining catalysts, and silica-based products that let other companies make products from refined crude oil. Its Performance Chemicals unit makes cement and concrete additives, fireproofing chemicals, and packaging sealants. The customers include chemicals companies, construction firms, and oil refiners.
Their self-description is "a premier specialty chemicals and materials company." Grace has more than 6,400 employees in nearly 40 countries, and annual sales of more than $2.5 billion. The company's stock, with ticker symbol "GRA," listed in 1953, trades on the New York Stock Exchange.
W.R. Grace & Compamy is one of the oldest and most adaptable U.S. corporations. Over the course of its 150-year existence, it has been involved in areas of business ranging from fertilizer to shipping to consumer goods to specialty chemicals. At one time or another, the company, in addition to its current role as one of the most comprehensive, specialty chemical and packing companies in the world, has been the world's largest distributor of spaghetti, a cowboy apparel retailer, and owner of an airline. Despite a tumultuous history--most recently involving extensive asbestos litigation and a resulting Chapter 11 filing--W.R. Grace has survived, with an adaptability and flexibility unusual in large companies. It may be hard to believe that W.R. Grace & Company started out shipping guano, or bird droppings, from South America.
W.R. Grace & Co. is engaged in the production and sale of specialty chemicals and specialty materials on a global basis. It operates in two business segments: Grace Davison and Grace Construction Products (GCP). The Grace Davison principally applies silica, alumina, zeolite and rubber and lattice technology in the design and manufacture of products. The customers include oil refiners, plastics and chemical manufacturers, producers of rigid food and beverage packaging, coatings manufacturers, consumer product manufacturers and pharmaceutical companies. The GCP produces specialty construction chemicals and specialty building materials. It manages its business under GCP Americas, GCP Europe and GCP Asia Pacific. W. R. Grace & Co.-Conn. (Grace-Conn) is its wholly owned subsidiary. In July, 2010, Grace acquired Chryso Brazil; In November, 2010, it acquired Wuhan Meilixin New Building Materials & Co. LTD and Synthetech, Inc., and In December, 2010, it acquired RS Solutions, LLC.
Grace Davison
The Grace Davison segment markets its products to a range of industrial customers, including those in the energy and refining industry, consumer, industrial and packaging industries, petrochemical and biochemical industries, and the pharmaceutical and life sciences industries. It includes Refining Technologies, Materials Technologies and Specialty Technologies. During the year ended December 31, 2010, Grace Davison accounted for 32.6% of the Company’s sales. It offers a range of catalysts, including its SmART Catalyst System and ApART catalyst system.
Refining Technologies include fluid catalytic cracking (FCC) catalysts, which help to crack the hydrocarbon chain in distilled crude oil to produce transportation fuels, such as gasoline and diesel fuels, and other petroleum-based products. FCC additives are used to reduce sulfur in gasoline, maximize propylene production from refinery FCC units, and reduce emissions of sulfur oxides, nitrogen oxides and carbon monoxide from refinery FCC units. It also includes hydroprocessing catalysts, marketed through the ART joint venture that are used in process reactors to upgrade heavy oils into lighter, more useful products by removing impurities, such as nitrogen, sulfur and heavy metals, allowing feedstocks to be used in the petroleum refining process.
Materials Technologies includes Engineered Materials, including silica-based and silica-alumina-based materials used in industrial applications, such as rubber and tires, precision investment casting, refractory, insulating glass windows, and drying applications, fulfilling various functions, such as reinforcement, high temperature binding and moisture scavenging; consumer applications, as a free-flow agent, carrier or processing aid in food and personal care products; as a toothpaste abrasive, and for the processing and stabilization of edible oils and beverages. It is also used in coatings and print media applications, consisting of functional additives that provide matting effects and corrosion protection for industrial coatings, enable enhanced media and paper quality in ink jet coatings, and act as a functional filler and retention aid in paper. It also includes Packaging Materials, including can and closure sealants used to seal can and bottle contents, and coatings for cans and closures that prevent metal corrosion, protect package contents from the influence of metal and ensure proper adhesion of sealing compounds and technologies designed to reduce off-taste effects and extend the shelf-life of packaged products.
Specialty Technologies includes polyolefin catalysts and catalyst supports that are essential components in the manufacture of polyethylene and polypropylene resins, and other chemical catalysts and process technologies used in a range of industrial, environmental and consumer applications, and catalysts and adsorbents for the efficient conversion of renewable feedstocks to fuels and chemicals. It includes silica-based separation media and complementary purification products, including chromatography columns and consumables used in healthcare, pharmaceutical, life science and related industries, silica excipients used in pharmaceutical formulations and CO2 adsorbents used in anesthesiology and mine safety applications, and instrumentation and reference standards used in the pharmaceutical, life science and related industries. Its Magnapore polymerization catalyst is used to produce polyethylene in the slurry loop process for pipe and film applications. Its POLYTRAK polymerization catalyst is designed to achieve polymer performance, particularly for impact-resistant applications, such as automobile bumpers and household appliances. Its Sylobloc polymer additives for producers and processors of plastic products prevent layers of polymer film from sticking together. Its Raney nickel, cobalt and copper hydrogenation and dehydrogenation catalysts are used for the synthesis of organic compounds for the fibers, pharmaceuticals, plastics, perfumes, soaps, color couplers and petroleum industries. Its Sylobead process adsorbents are used in petrochemical and natural gas processes for such applications as ethylene-cracked-gas-drying, natural gas drying and sulfur removal.
Grace Construction Products
The Grace Construction Products (GCP) segment produces and sells specialty construction chemicals and specialty building materials. It includes concrete admixtures and fibers used to modify the rheology, improve the durability and improve various other properties of concrete, mortar, masonry and other cementitious construction materials; additives used in cement processing; building materials used in commercial and residential construction and renovation to protect buildings and civil engineering structures from water, vapor and air penetration, and fire protection materials used to retard the spread of fire in buildings. Its GCP Americas includes products sold to customers in North, Central and South America; GCP Europe includes products sold to customers in Eastern and Western Europe, the Middle East, Africa and India, and GCP Asia Pacific includes products sold to customers in Asia (excluding India), Australia and New Zealand. During 2010, Grace Construction Products accounted for approximately 32.6% of the Company’s net sales.
The Company competes with Albemarle, BASF, Intercat, PQ/INEOS, Evonik, UOP, Altana, LyondellBasell, Univation, Waters Corporation, Agilent Technologies, Sika and Thermo-Fisher.
Legal action, of course, is a way of corporate life, and a company the size and breadth of W.R. Grace was certainly no exception. A high-profile pollution case in 1986 pitted Grace against eight families in Woburn, Massachusetts over the question of drinking-water contamination; Grace settled for a reported $8 million, and the case was a subject of the book and film "A Civil Action." In 1995, Grace's patent on the extraction of the natural pesticide, azadirachtin, from Indian neem trees was challenged, as the substance had been used for that purpose in India for hundreds of years. In 1998, the company agreed in a settlement to pay $32 million for remediation of a radioactive waste site, and the SEC sued Grace that same year over reserves pertaining to former subsidiary National Medical Care (the suit was settled out of court). 1999 brought an emergency order from the Environmental Protection Agency to clean up ammonia near Lansing, Michigan, which threatened the local water supply. The ammonia was a byproduct of Grace fertilizer production from the 1960s. In 2000, Grace agreed to pay the major portion of a $15.5 million settlement against book distributor and former subsidiary Baker & Taylor.
The asbestos suits, however, were a different kind of legal action. For one thing, there were more of them; for another, they dealt not only with damage done, but with potential injury as well. The trouble had been brewing for a while. As far back as 1985, Matthew Schifrin reported in Forbes that gypsum suppliers, including W.R. Grace as well juggernaut USG, could expect a flood of litigation in the wake of a high-profile personal injury suit related to asbestos, and in fact the first asbestos-related suit had been filed against Grace in 1982. In 1994, Grace settled charges of violating asbestos standards at its Libby, Montana tremolite mine, for over half a million dollars; in 2000, the EPA ordered Grace to spend an additional $5 million to clean up the site. Then, in 1999, Grace was party to a $200 million settlement to residents of Cook County, Illinois, who were exposed to asbestos in the 1960s and 1970s.
On October 5, 2000, Owens Corning, the United States' largest building materials manufacturer, filed for bankruptcy. While this did not affect Grace's fortunes directly, it did cause a general fall in stock prices among companies with asbestos liability--including Grace. More serious, however, was how removal of players from the field affected those remaining; as Merrill Lynch analyst Karen Gilsenan put it in Chemical Market Reporter, "Grace and the other remaining players could face increased liability ... co-defendants in many of these cases could end up shouldering a larger part of the financial burden." As of June 30 that year, Grace was named in over 53,000 asbestos lawsuits and had paid out a total of $1.15 billion in judgments and settlements. By April of the following year, that amount had risen to $1.9 billion, and the number of personal injury claims against the company topped 325,000.
By early 2001, Grace's stock price had fallen to under $2 a share, and President and CEO Norris admitted in the company's fourth-quarter conference call that Grace was reviewing the choice of actions available, and that "these include ... resolving our asbestos liability through a reorganization under Chapter 11." The decision was not long in coming; Grace filed for Chapter 11 on April 2, 2001. The filing included 61 of Graces 70 domestic subsidiaries, but none of its foreign subsidiaries.
Grace's troubles did not end there. An investigation related to the filing looked into whether Grace's massive divestitures in the 1990s, particularly National Medical Care and Cryovac, were meant to shield the assets tied up in these companies from asbestos liabilities. Atlanta attorney Sally Weaver noted in an affidavit related to the Libby case, "the asbestos liability faced by W.R. Grace & Co. was sufficiently large to constitute a strong inducement to insulate the company's assets."
Grace acted immediately to keep the company afloat, acquiring $250 million in financing to maintain day-to-day operations. The company also created the position of chief restructuring officer, naming Senior Vice-President and General Counsel David Siegel to the post. In fact, the outlook for Grace was generally considered good; Norris was quoted in Chemical Week as saying that "We are confident that once we can finally resolve this difficult issue, the company can emerge from reorganization as a strong, financially sound enterprise." And analyst Fred Siemer told Adhesives Age that "Grace is a really strong company ... the lawsuits simply got out of hand. The courts will set up a payment schedule, and Grace will meet it." Some saw the situation as illustrative of a fundamental imbalance between business and law; consultant Stephen Einhorn told the same publication that "W.R. Grace is another example of how the legal profession is in a battle with the business world for survival." Lehman Brothers analyst Timothy Gerdeman agreed, saying that "Grace is an excellent company, possessing an attractive portfolio, solid management, and solid cash flow, but it is a victim of the U.S. legal system." There seemed little doubt, despite the overwhelming volume of lawsuits and the bankruptcy filing, that the company that had persisted for 150 years would continue, and perhaps even thrive.
Principal Subsidiaries:Grace Performance Chemicals; Grace Davison Chemicals; Gloucester New Communities; Grace Logistics Services.
Principal Competitors:BASF AG; DuPont; Engelhard; Cytec Industries; GenTek Incorporated; Great Lakes Chemical Corporation.
OVERALL
Beta: 2.46
Market Cap (Mil.): $3,231.22
Shares Outstanding (Mil.): 73.44
Annual Dividend: --
Yield (%): --
FINANCIALS
GRA Industry Sector
P/E (TTM): 16.07 28.95 25.02
EPS (TTM): 21.29 -- --
ROI: 5.76 4.54 18.21
ROE: -- 6.24 18.47
Statistics:
Public Company
Incorporated: June 20, 1899
Employees: 6100 (2001)
Sales: $1,597.4 million (2000)
Stock Exchanges: New York
Ticker Symbol: GRA
NAIC: 325110 Petrochemical Manufacturing; 325188 All Other Inorganic Chemical Manufacturing; 325220 Adhesive Manufacturing; 325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing; 551112 Offices of Other Holding Companies
Key Dates:
1854: William Russell Grace becomes a partner in Bryce, Grace & Co., in Peru.
1865: The company, now called W.R. Grace & Co., moves to New York.
1899: W.R. Grace & Co. incorporates.
1904: Death of William Grace. His brother, Michael, succeeds as chairman.
1914: Grace National Bank established. Grace sends first commercial ship through Panama Canal.
1945: J. Peter Grace, grandson of William, becomes president of W.R. Grace & Co.
1953: W.R. Grace & Co. lists on New York Stock Exchange.
1954: Grace acquires Davison Chemical Company and Dewey & Almy Chemical Company. Cryovac spins off from Dewey & Almy as a separate subsidiary.
1958: Grace constructs Washington Research Center, a chemicals research facility in Maryland.
1960: Grace introduces Cryovac Type L shrinkwrap for meat and poultry.
1963: Grace introduces pellet silica gel for use as a packaging desicant.
1964: Grace Davison introduces XZ-15, a catalyst that increases gasoline efficiency.
1965: Grace introduces Bituthene waterproofing membrane, replacing paint-on waterproofing.
1968: Grace introduces Cryovac Market-Ready packaging for beef and Monokote spray-on fireproofing.
1972: Grace Davison introduces CO Combustion Promoter Additive.
1978: Grace introduces Ice & Water Shield for roofing.
1979: Grace introduces Darex Corrosion Inhibitor for concrete.
1984: Grace introduces Cryovac cook-in bags for institutional cooking.
1985: Grace acquires Chomerics, Inc., a packaging and coating manufacturer.
1986: Grace settles with eight Woburn, Massachusetts families in a water pollution case.
1987: Grace becomes first wholly foreign-owned company to do business in the People's Republic of China.
1991: Grace announces major restructuring plan, to culminate in a company with two lines of business, instead of dozens.
1992: First asbestos-related lawsuit is filed against W.R. Grace.
1993: J. Peter Grace retires as CEO of W.R. Grace & Co. and is succeeded by J.P. Bolduc. Grace introduces beer bottle seals that help retain freshness without preservatives.
1994: Grace settles out of court regarding the violation of Clean Air Act asbestos standards near Libby, Montana.
1995: J. Peter Grace dies at age 82; Balduc resigns. Albert J. Costello is named president, chairman, and CEO. Grace is challenged on its patent of its extraction of natural pesticide from Indian neem trees.
1996: Grace divests extensively, streamlining the company to six core businesses. Merchant Adventurer, a long-suppressed biography of William Grace, is published by S.R.
1998: Cryovac merges with Sealed Air Corporation. Grace streamlines further, to two essential businesses: specialty chemicals and container products.
1999: Paul Norris becomes chairman. Grace relocates headquarters from Boca Raton, Florida, to Columbia, Maryland.
2000: Grace makes acquisitions in keeping with its new focus, including Crosfield Groups, International Protective Coatings, Hampshire Polymers, and more.
2001: Grace files for Chapter 11 on April 2. The company acquires $250 million in financing to continue day-to0day operations, and names senior executive David Siegel to the newly-created position of chief restructuring officer.
Name Age Since Current Position
Alfred Festa 51 2008 Chairman of the Board, President, Chief Executive Officer
Andrew La Force 46 2008 Chief Financial Officer, Senior Vice President
W. Brian McGowan 61 2009 Senior Vice President
Mark Shelnitz 52 2005 Vice President, General Counsel, Secretary
William Corcoran 61 1999 Vice President - Public and Regulatory Affairs
Gregory Poling 55 2005 Vice President, President - Grace Davison
D. Andrew Bonham 50 2007 Vice President and President - Grace Construction Products
Pamela Wagoner 47 2009 Vice President, Chief Human Resources Officer
Thomas Vanderslice 79 2003 Lead Independent Director
Marye Fox 63 1996 Independent Director
John Akers 75 1997 Independent Director
John Murphy 79 1997 Independent Director
Ronald Cambre 72 1998 Independent Director
H. Furlong Baldwin 79 2002 Independent Director
Mark Tomkins 55 2006 Independent Director
Christopher Steffen 69 2006 Independent Director
Address:
7500 Grace Drive
Columbia, Maryland 21044
U.S.A.
The company has two main divisions, Davison Chemicals and Performance Chemicals. The Davison unit makes chemical catalysts, refining catalysts, and silica-based products that let other companies make products from refined crude oil. Its Performance Chemicals unit makes cement and concrete additives, fireproofing chemicals, and packaging sealants. The customers include chemicals companies, construction firms, and oil refiners.
Their self-description is "a premier specialty chemicals and materials company." Grace has more than 6,400 employees in nearly 40 countries, and annual sales of more than $2.5 billion. The company's stock, with ticker symbol "GRA," listed in 1953, trades on the New York Stock Exchange.
W.R. Grace & Compamy is one of the oldest and most adaptable U.S. corporations. Over the course of its 150-year existence, it has been involved in areas of business ranging from fertilizer to shipping to consumer goods to specialty chemicals. At one time or another, the company, in addition to its current role as one of the most comprehensive, specialty chemical and packing companies in the world, has been the world's largest distributor of spaghetti, a cowboy apparel retailer, and owner of an airline. Despite a tumultuous history--most recently involving extensive asbestos litigation and a resulting Chapter 11 filing--W.R. Grace has survived, with an adaptability and flexibility unusual in large companies. It may be hard to believe that W.R. Grace & Company started out shipping guano, or bird droppings, from South America.
W.R. Grace & Co. is engaged in the production and sale of specialty chemicals and specialty materials on a global basis. It operates in two business segments: Grace Davison and Grace Construction Products (GCP). The Grace Davison principally applies silica, alumina, zeolite and rubber and lattice technology in the design and manufacture of products. The customers include oil refiners, plastics and chemical manufacturers, producers of rigid food and beverage packaging, coatings manufacturers, consumer product manufacturers and pharmaceutical companies. The GCP produces specialty construction chemicals and specialty building materials. It manages its business under GCP Americas, GCP Europe and GCP Asia Pacific. W. R. Grace & Co.-Conn. (Grace-Conn) is its wholly owned subsidiary. In July, 2010, Grace acquired Chryso Brazil; In November, 2010, it acquired Wuhan Meilixin New Building Materials & Co. LTD and Synthetech, Inc., and In December, 2010, it acquired RS Solutions, LLC.
Grace Davison
The Grace Davison segment markets its products to a range of industrial customers, including those in the energy and refining industry, consumer, industrial and packaging industries, petrochemical and biochemical industries, and the pharmaceutical and life sciences industries. It includes Refining Technologies, Materials Technologies and Specialty Technologies. During the year ended December 31, 2010, Grace Davison accounted for 32.6% of the Company’s sales. It offers a range of catalysts, including its SmART Catalyst System and ApART catalyst system.
Refining Technologies include fluid catalytic cracking (FCC) catalysts, which help to crack the hydrocarbon chain in distilled crude oil to produce transportation fuels, such as gasoline and diesel fuels, and other petroleum-based products. FCC additives are used to reduce sulfur in gasoline, maximize propylene production from refinery FCC units, and reduce emissions of sulfur oxides, nitrogen oxides and carbon monoxide from refinery FCC units. It also includes hydroprocessing catalysts, marketed through the ART joint venture that are used in process reactors to upgrade heavy oils into lighter, more useful products by removing impurities, such as nitrogen, sulfur and heavy metals, allowing feedstocks to be used in the petroleum refining process.
Materials Technologies includes Engineered Materials, including silica-based and silica-alumina-based materials used in industrial applications, such as rubber and tires, precision investment casting, refractory, insulating glass windows, and drying applications, fulfilling various functions, such as reinforcement, high temperature binding and moisture scavenging; consumer applications, as a free-flow agent, carrier or processing aid in food and personal care products; as a toothpaste abrasive, and for the processing and stabilization of edible oils and beverages. It is also used in coatings and print media applications, consisting of functional additives that provide matting effects and corrosion protection for industrial coatings, enable enhanced media and paper quality in ink jet coatings, and act as a functional filler and retention aid in paper. It also includes Packaging Materials, including can and closure sealants used to seal can and bottle contents, and coatings for cans and closures that prevent metal corrosion, protect package contents from the influence of metal and ensure proper adhesion of sealing compounds and technologies designed to reduce off-taste effects and extend the shelf-life of packaged products.
Specialty Technologies includes polyolefin catalysts and catalyst supports that are essential components in the manufacture of polyethylene and polypropylene resins, and other chemical catalysts and process technologies used in a range of industrial, environmental and consumer applications, and catalysts and adsorbents for the efficient conversion of renewable feedstocks to fuels and chemicals. It includes silica-based separation media and complementary purification products, including chromatography columns and consumables used in healthcare, pharmaceutical, life science and related industries, silica excipients used in pharmaceutical formulations and CO2 adsorbents used in anesthesiology and mine safety applications, and instrumentation and reference standards used in the pharmaceutical, life science and related industries. Its Magnapore polymerization catalyst is used to produce polyethylene in the slurry loop process for pipe and film applications. Its POLYTRAK polymerization catalyst is designed to achieve polymer performance, particularly for impact-resistant applications, such as automobile bumpers and household appliances. Its Sylobloc polymer additives for producers and processors of plastic products prevent layers of polymer film from sticking together. Its Raney nickel, cobalt and copper hydrogenation and dehydrogenation catalysts are used for the synthesis of organic compounds for the fibers, pharmaceuticals, plastics, perfumes, soaps, color couplers and petroleum industries. Its Sylobead process adsorbents are used in petrochemical and natural gas processes for such applications as ethylene-cracked-gas-drying, natural gas drying and sulfur removal.
Grace Construction Products
The Grace Construction Products (GCP) segment produces and sells specialty construction chemicals and specialty building materials. It includes concrete admixtures and fibers used to modify the rheology, improve the durability and improve various other properties of concrete, mortar, masonry and other cementitious construction materials; additives used in cement processing; building materials used in commercial and residential construction and renovation to protect buildings and civil engineering structures from water, vapor and air penetration, and fire protection materials used to retard the spread of fire in buildings. Its GCP Americas includes products sold to customers in North, Central and South America; GCP Europe includes products sold to customers in Eastern and Western Europe, the Middle East, Africa and India, and GCP Asia Pacific includes products sold to customers in Asia (excluding India), Australia and New Zealand. During 2010, Grace Construction Products accounted for approximately 32.6% of the Company’s net sales.
The Company competes with Albemarle, BASF, Intercat, PQ/INEOS, Evonik, UOP, Altana, LyondellBasell, Univation, Waters Corporation, Agilent Technologies, Sika and Thermo-Fisher.
Legal action, of course, is a way of corporate life, and a company the size and breadth of W.R. Grace was certainly no exception. A high-profile pollution case in 1986 pitted Grace against eight families in Woburn, Massachusetts over the question of drinking-water contamination; Grace settled for a reported $8 million, and the case was a subject of the book and film "A Civil Action." In 1995, Grace's patent on the extraction of the natural pesticide, azadirachtin, from Indian neem trees was challenged, as the substance had been used for that purpose in India for hundreds of years. In 1998, the company agreed in a settlement to pay $32 million for remediation of a radioactive waste site, and the SEC sued Grace that same year over reserves pertaining to former subsidiary National Medical Care (the suit was settled out of court). 1999 brought an emergency order from the Environmental Protection Agency to clean up ammonia near Lansing, Michigan, which threatened the local water supply. The ammonia was a byproduct of Grace fertilizer production from the 1960s. In 2000, Grace agreed to pay the major portion of a $15.5 million settlement against book distributor and former subsidiary Baker & Taylor.
The asbestos suits, however, were a different kind of legal action. For one thing, there were more of them; for another, they dealt not only with damage done, but with potential injury as well. The trouble had been brewing for a while. As far back as 1985, Matthew Schifrin reported in Forbes that gypsum suppliers, including W.R. Grace as well juggernaut USG, could expect a flood of litigation in the wake of a high-profile personal injury suit related to asbestos, and in fact the first asbestos-related suit had been filed against Grace in 1982. In 1994, Grace settled charges of violating asbestos standards at its Libby, Montana tremolite mine, for over half a million dollars; in 2000, the EPA ordered Grace to spend an additional $5 million to clean up the site. Then, in 1999, Grace was party to a $200 million settlement to residents of Cook County, Illinois, who were exposed to asbestos in the 1960s and 1970s.
On October 5, 2000, Owens Corning, the United States' largest building materials manufacturer, filed for bankruptcy. While this did not affect Grace's fortunes directly, it did cause a general fall in stock prices among companies with asbestos liability--including Grace. More serious, however, was how removal of players from the field affected those remaining; as Merrill Lynch analyst Karen Gilsenan put it in Chemical Market Reporter, "Grace and the other remaining players could face increased liability ... co-defendants in many of these cases could end up shouldering a larger part of the financial burden." As of June 30 that year, Grace was named in over 53,000 asbestos lawsuits and had paid out a total of $1.15 billion in judgments and settlements. By April of the following year, that amount had risen to $1.9 billion, and the number of personal injury claims against the company topped 325,000.
By early 2001, Grace's stock price had fallen to under $2 a share, and President and CEO Norris admitted in the company's fourth-quarter conference call that Grace was reviewing the choice of actions available, and that "these include ... resolving our asbestos liability through a reorganization under Chapter 11." The decision was not long in coming; Grace filed for Chapter 11 on April 2, 2001. The filing included 61 of Graces 70 domestic subsidiaries, but none of its foreign subsidiaries.
Grace's troubles did not end there. An investigation related to the filing looked into whether Grace's massive divestitures in the 1990s, particularly National Medical Care and Cryovac, were meant to shield the assets tied up in these companies from asbestos liabilities. Atlanta attorney Sally Weaver noted in an affidavit related to the Libby case, "the asbestos liability faced by W.R. Grace & Co. was sufficiently large to constitute a strong inducement to insulate the company's assets."
Grace acted immediately to keep the company afloat, acquiring $250 million in financing to maintain day-to-day operations. The company also created the position of chief restructuring officer, naming Senior Vice-President and General Counsel David Siegel to the post. In fact, the outlook for Grace was generally considered good; Norris was quoted in Chemical Week as saying that "We are confident that once we can finally resolve this difficult issue, the company can emerge from reorganization as a strong, financially sound enterprise." And analyst Fred Siemer told Adhesives Age that "Grace is a really strong company ... the lawsuits simply got out of hand. The courts will set up a payment schedule, and Grace will meet it." Some saw the situation as illustrative of a fundamental imbalance between business and law; consultant Stephen Einhorn told the same publication that "W.R. Grace is another example of how the legal profession is in a battle with the business world for survival." Lehman Brothers analyst Timothy Gerdeman agreed, saying that "Grace is an excellent company, possessing an attractive portfolio, solid management, and solid cash flow, but it is a victim of the U.S. legal system." There seemed little doubt, despite the overwhelming volume of lawsuits and the bankruptcy filing, that the company that had persisted for 150 years would continue, and perhaps even thrive.
Principal Subsidiaries:Grace Performance Chemicals; Grace Davison Chemicals; Gloucester New Communities; Grace Logistics Services.
Principal Competitors:BASF AG; DuPont; Engelhard; Cytec Industries; GenTek Incorporated; Great Lakes Chemical Corporation.
OVERALL
Beta: 2.46
Market Cap (Mil.): $3,231.22
Shares Outstanding (Mil.): 73.44
Annual Dividend: --
Yield (%): --
FINANCIALS
GRA Industry Sector
P/E (TTM): 16.07 28.95 25.02
EPS (TTM): 21.29 -- --
ROI: 5.76 4.54 18.21
ROE: -- 6.24 18.47
Statistics:
Public Company
Incorporated: June 20, 1899
Employees: 6100 (2001)
Sales: $1,597.4 million (2000)
Stock Exchanges: New York
Ticker Symbol: GRA
NAIC: 325110 Petrochemical Manufacturing; 325188 All Other Inorganic Chemical Manufacturing; 325220 Adhesive Manufacturing; 325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing; 551112 Offices of Other Holding Companies
Key Dates:
1854: William Russell Grace becomes a partner in Bryce, Grace & Co., in Peru.
1865: The company, now called W.R. Grace & Co., moves to New York.
1899: W.R. Grace & Co. incorporates.
1904: Death of William Grace. His brother, Michael, succeeds as chairman.
1914: Grace National Bank established. Grace sends first commercial ship through Panama Canal.
1945: J. Peter Grace, grandson of William, becomes president of W.R. Grace & Co.
1953: W.R. Grace & Co. lists on New York Stock Exchange.
1954: Grace acquires Davison Chemical Company and Dewey & Almy Chemical Company. Cryovac spins off from Dewey & Almy as a separate subsidiary.
1958: Grace constructs Washington Research Center, a chemicals research facility in Maryland.
1960: Grace introduces Cryovac Type L shrinkwrap for meat and poultry.
1963: Grace introduces pellet silica gel for use as a packaging desicant.
1964: Grace Davison introduces XZ-15, a catalyst that increases gasoline efficiency.
1965: Grace introduces Bituthene waterproofing membrane, replacing paint-on waterproofing.
1968: Grace introduces Cryovac Market-Ready packaging for beef and Monokote spray-on fireproofing.
1972: Grace Davison introduces CO Combustion Promoter Additive.
1978: Grace introduces Ice & Water Shield for roofing.
1979: Grace introduces Darex Corrosion Inhibitor for concrete.
1984: Grace introduces Cryovac cook-in bags for institutional cooking.
1985: Grace acquires Chomerics, Inc., a packaging and coating manufacturer.
1986: Grace settles with eight Woburn, Massachusetts families in a water pollution case.
1987: Grace becomes first wholly foreign-owned company to do business in the People's Republic of China.
1991: Grace announces major restructuring plan, to culminate in a company with two lines of business, instead of dozens.
1992: First asbestos-related lawsuit is filed against W.R. Grace.
1993: J. Peter Grace retires as CEO of W.R. Grace & Co. and is succeeded by J.P. Bolduc. Grace introduces beer bottle seals that help retain freshness without preservatives.
1994: Grace settles out of court regarding the violation of Clean Air Act asbestos standards near Libby, Montana.
1995: J. Peter Grace dies at age 82; Balduc resigns. Albert J. Costello is named president, chairman, and CEO. Grace is challenged on its patent of its extraction of natural pesticide from Indian neem trees.
1996: Grace divests extensively, streamlining the company to six core businesses. Merchant Adventurer, a long-suppressed biography of William Grace, is published by S.R.
1998: Cryovac merges with Sealed Air Corporation. Grace streamlines further, to two essential businesses: specialty chemicals and container products.
1999: Paul Norris becomes chairman. Grace relocates headquarters from Boca Raton, Florida, to Columbia, Maryland.
2000: Grace makes acquisitions in keeping with its new focus, including Crosfield Groups, International Protective Coatings, Hampshire Polymers, and more.
2001: Grace files for Chapter 11 on April 2. The company acquires $250 million in financing to continue day-to0day operations, and names senior executive David Siegel to the newly-created position of chief restructuring officer.
Name Age Since Current Position
Alfred Festa 51 2008 Chairman of the Board, President, Chief Executive Officer
Andrew La Force 46 2008 Chief Financial Officer, Senior Vice President
W. Brian McGowan 61 2009 Senior Vice President
Mark Shelnitz 52 2005 Vice President, General Counsel, Secretary
William Corcoran 61 1999 Vice President - Public and Regulatory Affairs
Gregory Poling 55 2005 Vice President, President - Grace Davison
D. Andrew Bonham 50 2007 Vice President and President - Grace Construction Products
Pamela Wagoner 47 2009 Vice President, Chief Human Resources Officer
Thomas Vanderslice 79 2003 Lead Independent Director
Marye Fox 63 1996 Independent Director
John Akers 75 1997 Independent Director
John Murphy 79 1997 Independent Director
Ronald Cambre 72 1998 Independent Director
H. Furlong Baldwin 79 2002 Independent Director
Mark Tomkins 55 2006 Independent Director
Christopher Steffen 69 2006 Independent Director
Address:
7500 Grace Drive
Columbia, Maryland 21044
U.S.A.