W.R. Grace & Company - Company Profile, Information, Business Description, History, Background Information on W.R. Grace & Company

7500 Grace Drive
Columbia, Maryland 21044

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Grace is a leader in catalysts and silica products, construction products and container products. Our products enhance the performance of your petroleum products, ensure the integrity of some of the world's major buildings and bridges, increase the quality of images on ink jet paper, improve the appearance of your fine wood furniture and preserve the safety of your foods.

History of W.R. Grace & Company

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.

In the Beginning

In 1854, William Russell Grace and his father, James Grace, traveled to Callao, Peru. James, a prosperous Irish landowner, wanted to establish an Irish agricultural community. He hoped to rebuild the family fortune which had been depleted during the Irish famine of 1847-48 when he provided employment to a large number of people from the countryside around his estate. Not finding the prospects he had hoped for in Peru, James soon returned to Ireland.

William, however, remained in Peru and became a clerk in the trading firm of Bryce & Company. His value to the company was recognized after a few years when he was made a partner in the firm, which was then renamed Bryce, Grace & Company. Under William's direction, the commercial house soon became the largest in the country.

Poor health forced William to retire from the Peruvian business in 1865. He returned to New York City where he had spent a year during his youth. His brother, Michael P. Grace, who had joined him earlier in South America, remained behind to manage the growing family business in Peru which was soon named Grace Brothers & Company.

With his health fully recovered, William established W.R. Grace & Company in New York. William had long been a confidant of the Peruvian president, and through this connection the company became the Peruvian government's agent for the sale of nitrate of soda.

The Chile-Peruvian war of 1887-81 severely weakened Peru's economy, and the government had difficulty repaying its foreign debt. In 1887, a group of foreign bondholders in the Peruvian government, mostly British, called on Grace Brothers & Co. to attempt a settlement of the debt. Michael accepted the offer and in the settlement he negotiated, known as the Grace-Donoughmore Contract, two Peruvian bond issues amounting to $250 million were cancelled in exchange for equally valuable concessions to the bondholders. Bondholders received shares in a newly-established company, The Peruvian Corporation, which received the rights to two state-owned railroads for 66 years, all Peruvian guano output up to 3 million tons (except for that on Chincha Island), a government promise to pay shareholders 80,000 pounds sterling annually for 30 years, and ownership of the lucrative Cerro de Pasco silver mines. In return, the shareholders agreed to finish uncompleted railroads and repair existing ones within certain time limits. (Most of the contracts for supplying the railroad building program went to the Grace company.)

At the time of the company's incorporation in Connecticut in 1899, Grace listed capital of $6 million. The amount, however, undervalued the company's worth. since it did not include Grace Brothers & Co. Limited in London and its branches in San Francisco, Lima, and Callo, Peru as well as Valparaiso, Santiago, and Concepcion Chile.

The Next Generation

When William Grace died in 1904, control of the company passed to his brother Michael, who became chairman. In 1907, he negotiated a new agreement with the Peruvian government annulling the terms of the previous agreements and extending the Peruvian corporation's lease for 17 years. The government agreed to continue paying £80,000 annually to shareholders for 30 years, but made claims to one half of the company's net proceeds.

William's son, Joseph, who started working for the company's corporate offices in New York in 1894 when he graduated from Columbia University, became President in 1909. The company underwent a period of rapid growth during Joseph's presidency, and, in the process, greatly expanded South American production and trade.

In 1929, the year Joseph became chairman of the board, W.R. Grace and Pan American Airways together established the first international air service down the west coast of South America, Pan American Grace Airways otherwise known as Panagra.

After suffering from a stroke in 1946, Joseph retired. A feud subsequently broke out among family members over who should run the company. Eventually, Joseph prevailed, and his son, J. Peter, after some misgivings of his own, became president.

Expansion and Diversification

At the age of 32, Peter inherited a company with $93 million in assets and whose primary interests were in Grace Steamship Lines, Grace National Bank, Panagra, sugar plantations and cotton mills in Peru and Chile. The company also produced paper and biscuits, mined tin, and grew coffee.

From the very beginning, Peter was concerned about the political and economic instability of South American nations that he believed threatened Grace's operations. In particular, many companies had shown resistance to U.S. domination of their economies. With what proved to be remarkable foresight, Peter embarked on a plan of diversifying into U.S. and European investments, seeking to reduce South American investments from 100 percent to 5 percent. To raise the capital necessary for his expansion the company went public in 1953. The board of directors resisted his plan of broadening investment and, though the Grace family owned more than one-half of the company's stock, he nearly lost his position as chief executive officer.

Attracted by profits achieved by Dupont, Peter began searching for investments in the chemical industry. He purchased two major chemical companies which made Grace the nation's fifth largest chemical producer. In 1954 Grace completed a merger with Davison Chemical Corporation, a manufacturer of agricultural and industrial chemicals. Later that year, Grace purchased Dewey & Almy Chemical Company, an investment one industry analyst later called "among the greatest acquisitions of all time." A producer of sealing compounds and batteries, Dewey and Almy grew rapidly and earnings quickly surpassed the $35 million purchase price. This became the foundation for one of the world's largest specialty chemical operations. Over the next 11 years, Grace acquired 23 more chemical companies for four million shares of stock.

Seeking to enter markets that could compensate for the cyclic nature of the fertilizer industry, Grace set out to build the "General Foods of Europe." Over the decade, Peter Grace purchased a chocolate producer in the Netherlands, a Danish ice cream maker, and an Italian pasta company. Critics charge that he was searching for companies he could shape and manage himself, attempting to prove he was his ancestors' equal as an entrepreneur.

Peter continued selling the company's old businesses and using the money to acquire new ones. In August 1965, he sold Grace National Bank to what is now Marine Midland Bank. The next year, he acquired a 53 percent interest in Miller Brewing Company. And in 1967 Peter sold the company's 50 percent interest in Pan American Grace Airways to Braniff Airways for $15 million.

The late 1960s proved a difficult time for Grace. The fertilizer market became severely depressed, where it had once been a source of substantial profit. Facing falling profits, Grace attempted to boost efficiency by closing marginal plants, but in the process the company incurred huge losses.

In the meantime, relations between Grace and Miller Brewery's minority stockholder, an heir to the company's founder, had turned for the worse. Peter realized he would never be able to buy the rest of the company. Thus, in 1969, Grace sold its holdings in Miller for $130 million, resulting in a net profit of $53.9 million.

In the early 1960s, the company management had reversed its previous policy in regard to South American investment and began pouring funds into paper, food and chemical companies. Later that year, however, Grace's fears about these investments came true when the Peruvian government seized the company's sugar mills and a 25,000 acre sugar plantation. Earnings on South American operations tumbled from $12 million the previous year to zero on sales of $256 million. Peter, not discounting the possibility of pulling completely out of the region, said that company investments in future would be made on the attitude of each individual country.

In the early 1970s, W.R. Grace made a move into consumer goods. In 1970, the company purchased Baker & Taylor, a supplier of books to libraries, as well as FAO Schwarz, the New York toy store. Hoping to cash in on the U.S.'s love affair with leisure-time activities, the company acquired Herman's World of Sporting, a landmark in New York's financial district.

Grace saw a chance for substantial returns in the sporting goods business. Involvement in the market was especially attractive since there were no national sporting goods chain stores. Department stores, preferring the profits and turnover of apparel and other "soft" product lines, had shunned sporting goods. The company sought to expand Herman's from three stores with $10 million in sales into the first national chain. As part of the plan, Grace bought Mooney's of Boston, Atlas of Washington, and Klein's of Chicago and converted them to Herman's sporting goods stores.

In 1971, the year that Peter became chairman, the company's profit was at its lowest point in years, after hitting a high of $82 million in 1966, and its return on equity was well below that of other conglomerates. Extraordinary (or, one time only) write-offs, became such a regular part of the company's financial statements (just that year the company wrote off $7.8 million from closing fertilizer plants) that some security analysts had come to consider them a regular part of Grace's operations. Consequently it was not surprising that in 1972, company executives produced a 700-page memo, establishing 20 criteria for acquiring a new business. Most importantly, these executives decided that in order to be purchased a company must have $20 million in sales and $1 million in profits.

In 1974, Peter began to reduce the company's holdings by selling a grocery products venture, and began to concentrate company investments in three areas: consumer goods, chemicals, and natural resources. Fertilizer profits had rebounded because of low supply and high worldwide demand, but the consumer groups showed lackluster profits even with large sales in sporting goods. In addition, Grace's final investment in Peru was severed later in the year. The Peruvian government nationalized its paper and chemical operations, leading to a loss of $11.5 million for the company, despite $23.6 million in compensation from the government.

By 1976, the company was ready to continue its move into consumer goods and services. Later in the year, when the company was about to make a public stock offering to raise capital for further expansion, it received an offer from Peter's old friend Friedrich Karl Flick, who during the 1950's had worked for Grace National Bank for three years. Flick, head of Friedrich Flick Industrial Corporation, Germany's largest family-owned company, was looking for somewhere to invest the $900 million it had recently made from the sale of its 29 percent interest in Daimler-Benz to Deutsche Bank. Wanting to take advantage of German laws that granted tax free capital gains and dividends earned on investments of more than 25 percent ownership in foreign companies, Flick eventually bought a 30 percent stake in Grace.

Although Grace family interest in the company had dwindled to 3 percent, Peter made it clear that Flick would not run the company. Receiving seats for only three of the company's 35 directors, Flick nonetheless obliged, since he was concerned with his own business ventures in Europe.

The consumer divisions' growth accompanied increasing internal strife at the company. In 1979, after years of watching the company's stock trading at low earnings multiples, management proposed splitting up the company into seven or eight separate companies which would command higher stock prices. Worried about the company's increasing reliance on consumer products, they also suggested selling the energy division whose market value could have been as much as $1 billion over book value. Peter, unwilling to give up his control of the company which might also have resulted from these proposals, rejected both ideas.

1980s: The Beginning of Specialization

At the beginning of the 1980s, Grace's move into natural resources appeared as if it was going to be as profitable as its venture into chemicals. The company's energy reserves had grown to 73 million barrels of oil, 300 billion cubic feet of natural gas, and 239 million tons of coal. Specialty chemicals sales and earnings, meanwhile, rose an average of 15 percent annually over the last decade. The company had 85 product lines, ranging from plastic packaging materials to petroleum cracking catalysts, many of which were market leaders.

However, the company suffered with falling energy prices in 1981. Moreover, in 1982, the combination of a poor natural resources profit and a further decline in the fertilizer business led to a 50 percent decrease in the company's profitability. As a result, Grace petroleum was put up for sale in 1984. The retail and consumer goods divisions, which were returning just 14 percent of profits on 36 percent of sales, looked like they might be next.

At the same time, however, Grace began to pursue business interests that would eventually become the main focus of the company: specialty chemicals and materials. Particularly significant was the 1985 acquisition of Chomerics, Inc., a packaging and coating manufacturer. The company, which had been losing money, was acquired through a $99 million stock swap.

The company's problems were compounded in 1984, when Flick became the target of a government bribery scandal and was forced to confront a $260 million dollar tax bill. Rumors abounded in West Germany that Flick was looking for someone to buy the family business, putting Grace at risk of a hostile takeover.

The rumors about Flick proved true, when Deutsche Bank acquired the company and put its holdings in Grace on the market. The company immediately seized the attention of takeover specialists, since Grace's assets could be sold at a profit of $20 to $25 more than the market price. GAF Corporation Chairman J. Heyman approached Grace about a friendly takeover, causing Grace's stock to rise 30 percent.

Although already strapped for cash, Peter, fearing a takeover, was forced to buy Flick's holdings for $598 million. The acquisition put Grace's debt at $2.6 billion and caused a downgrade of Grace's credit rating.

Critics, both inside and outside the company, regarded this as an unthinking decision. Complaints about Peter's domination of the company and an incoherent business strategy put mounting pressure on him to sell the consumer division. Since Grace was desperate for cash, this forced Peter to comply. Energy and fertilizer investments were reduced. Herman's was sold to Dee Corporation for $227 million, realizing a profit of $144 million. The remaining consumer goods businesses were sold for $500 million, but because of high expansion costs at the 317-store home center operations, Grace barely broke even on the sale. In addition, in 1986, Peter agreed to selling 51 percent of the restaurant division to its management in a leveraged buyout, although Grace did not bail out of the newly created Restaurant Enterprises Group until 1993. In 1986, William Baldwin wrote in Forbes that a $1 investment in W.R. Grace in 1945 would be worth $23 23 years later; but, the same investment in the S&P 500 would be worth a corresponding $77. Some speculated that Peter wished to live up to his grandfather's entrepreneurial spirit by remaking the company his own way, and Peter himself said that "My grandfather didn't found any of the things we have now. He didn't found this company. I did." While Peter Grace was definitely onto something, Forbes' Thomas Jaffe considered the company severely undervalued in 1989. Speculation arose that Peter might resign.

The 1990s: A Leaner, Meaner Company

In January 1993, J. Peter Grace did stepped down as CEO, ending the longest term of any CEO in history. His successor, J.P. Balduc, had been groomed for the position since joining Grace in 1983, eventually becoming COO and president in 1990. In contrast to Peter Grace, of whom Smith Barney analyst James Wilbur said, "You never knew what business he'd be in next," Balduc took the reins of an ambitious restructuring plan, stating, "There is no backing up. The days of Grace buying companies that are not strategic are gone." First announced in 1991, this plan was to cut back Grace's operations to two lines of business, specialty chemicals and health care, and called for a divestment of 25 percent of the company's assets. Although Peter Grace retained his position as chairman, it was clear that Balduc was in charge as the company began to lose all resemblance to a family-run operation, becoming more like a standard corporation.

This transformation, it seemed, was long overdue. Although Grace topped $6 billion a year in sales in 1993, its profit on those sales was only $26 million, and the sprawling company was so heavily diversified that it owned over 100 subsidiaries. When Balduc trimmed it to six core businesses, the sold-off assets, which included divisions ranging from organic chemicals to restaurants to book distribution, were worth nearly $1.5 billion. Some argued, reflecting the emphasis on specialization in business that had become a 1990s trend, that even six was too much, particularly when the six ranged from specialty chemicals to health care to food packaging. Under Balduc's leadership, health care emerged as the most prominent part of Grace's business, in the form of the National Medical Care division, and the company's goal of $10 billion by 2000 seemed possible.

However, Balduc's term had barely begun when the company--and, Balduc himself--was once again embroiled in controversy. On March 2, 1995, Balduc abruptly resigned from Grace, citing philosophical differences with the board of directors. Inevitably, further--and, less abstract--details surfaced, among them allegations that Balduc had threatened to disclose details of previously unreported financial compensations to J. Peter Grace and to his son, J. Peter Grace III. Additional allegations of sexual harassment on Balduc's part toward five female Grace employees surfaced as well, although the harassment allegations came not via Grace's official procedure on sexual harassment, but via the company's board of directors, with no formal complaint being filed. This gave rise to suspicions that the company wished to avoid placing Balduc in the chairman's seat. The chairman's seat had recently been vacated by Peter Grace due to pressure from major shareholders, who also influenced the company's decision to reduce its board of directors from 22 members to 12. Whatever the truth may have been, both Balduc and Peter Grace departed; the latter, already ill from lung cancer, died a few weeks later, and Albert J. Costello was named CEO.

If anything, Costello was more aggressive about streamlining the company than his predecessor. This included spinning off Grace's medical care division, National Medical Care, in a sale to German-based medical company Fresenius AG, despite a federal investigation into the division's handling of Medicare charges and an FDA citation regarding importation of dialysis equipment from its Dublin plant. In addition, Grace sold its Dearborn water treatment business--then the third largest in the United States--to Betz Laboratories; its transgenic plant business to Monsanto; its TEC systems division to Sequa Corporation; its specialty polymers business to National Starch and Chemical Co.; its cocoa business to Archer Daniels Midland; and more. Other actions included a buyback of 10 million shares of common stock, amounting to approximately 10 percent of the total, as well as a new two-year corporate reorganization, inaugurated late in 1995. This move, designed to cut costs by $100 million, reduced the company's staff by 800. Over 50 percent of the cost reduction was due to decreased staff as Grace sought to reduce its number of core businesses from six to three. Those businesses were streamlined also; for instance, in June 1997, Grace set out to restructure its packaging business on a global basis, saving an estimated $25 million a year.

Costello was not only focused on selling, however. At the annual shareholders' meeting in 1996, he said, "We are a much more focused and financially disciplined company, targeting performance levels that will put us in the top quartile of our peer companies." While Grace's divestments had increased its value and decreased its liability, its CEO sought acquisitions and joint ventures in keeping with the company's newer, narrower focus. In April 1998, Grace's remaining divisions essentially split: the specialty chemicals divisions, consisting of Grace Davison, Grace Construction Products, and Darex Container Products, kept the W.R. Grace name, while the Cryovac packaging business merged with Sealed Air Corporation. Now in essence a chemicals company, W.R. Grace & Co. bore no remaining resemblance to its namesake's initial venture.

On November 2, 1998, the top chair at the new Grace changed hands again. This time the new name was former Allied-Signal executive Paul Norris, who was named president and CEO, and was slated to take the chairman position as well. Norris immediately announced a plan of divestiture, streamlining, and job cutting, and was quoted in trade publication Chemical Week that "We can't just offer products to our customers anymore. We have to control our costs as well as help control our customers' costs by providing services to them." The following year, Grace moved its corporate headquarters from Boca Raton, Florida, where it had been quartered since 1991, to Columbia, Maryland, the location of its specialty chemicals division. The move cut costs both by reducing staff and by moving the headquarters closer to its business divisions. Also in 1999, Grace cut 370 jobs, or approximately 8 percent of its workforce, as part of a restructuring designed to streamline the company still further. Grace was not alone; in 1999, the trade publication Chemical Week noted an industry-wide trend toward reducing spending, as a slowing economy cut into profits. Chemical Week noted that Grace's capital spending in 1998 was $95 million, as opposed to $137 million in 1997, a 30 percent reduction. In addition, Chemical Week reported that in 1999, of the 40 top publicly traded chemical companies, 11 had new CEOs.

By 2000, it appeared that Norris had succeeded in his aim. W.R. Grace had slimmed down from a $5.7 billion conglomerate to a $1.5 billion company specializing in chemicals. Instead of 30 business divisions, it had only two: Grace Davison, and its performance chemicals division. In 1999, the company had $1.47 billion in sales, with a goal of 15 percent earnings growth for 2000. By 2001, Norris intended to reach the $2 billion sales mark, partly through acquisitions, partly through the introduction of new products, and to boost the company's sagging stock price. This reflected the two-fold strategy he described to Chemical Specialties in July 2000: "We have a number of initiatives. The majority involve bringing new products to existing markets. But in some cases we want to enter new markets with new applications for existing products." He added that "Growth is the most difficult of all strategic agenda items, but I think it's the most important." Although Grace continued to acquire new companies, the deals involved were relatively small, and in keeping with the company's new goals: purchases of coating and sealant manufacturer Bayem SA in 1996, food packaging manufacturer Schurpack in 1997, the construction chemicals division of Sociedad Petreos in 2000 (incidentally, returning Grace to its original region of business in South America), Crosfield Group's hydroprocessing catalyst business in 2000, International Protective Coatings Corporation in 2000, and similar acquisitions were examples of the company's more focused acquisitions approach. Acquisitions continued into 2001, even as Grace faced redoubled legal problems.

With the new millennium, Grace faced a new obstacle: asbestos litigation. And, while Norris claimed that publicity from the asbestos suits against the company--numbering in the hundreds of thousands by 2001--had little to do with the stock price, it is a fair bet that Grace's bankruptcy filing did.

The 1990s also saw the long-overdue publication of William Russell Grace's biography, Merchant Adventurer, by the Pulitzer Prize-winning author Marquis James. The book, commissioned by William Grace's son Joseph, and originally scheduled for publication by Viking Press in 1948, was suppressed by the Grace company, for reasons that remain unclear. Discovered in a disused storage room in 1978 by historian Lawrence Clayton, himself the author of Grace: W.R. Grace & Co., the Formative Years, 1850-1930, the book was finally published by Scholastic Resources in 1993.

2001: The Final Chapter?

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.


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