General Signal Corporation
List of Deals
The General Railway Signal Company was founded in New York in 1904. The company supplied control equipment to the railroad industry; its products were instrumental in automation, warehousing, switchyards, and other aspects of the railroad business. As the transportation industry diversified, the company branched out into other markets, such as mass transportation rail lines. General Railway Signal became a leader in transportation supply.
Sales in railroad supplies remained around $20 million per year during the 1950s. No substantial changes occurred in the company's product line until 1960. At that time, the company acquired the Regina Corporation, which manufactured household floor-care appliances. In 1960 the company merged with New York Air Brake Company, a supplier of brake systems to railroads.
The company doubled in size between 1960 and 1962. By 1963 the company had diversified enough to drop "Railway" from its name and became General Signal Corporation. Still a respected supplier to the railroad industry, much of the company was converted to the manufacture of specialty control devices that could be adapted to many purposes, notably pollution control, mass transit systems, and medical and educational facilities. By the mid-1960s the mix of businesses created by the company was 20 percent water treatment plants and industrial process controls, 27 percent transportation controls, 18 percent building controls and protection devices, 16 percent home appliances, 13 percent fluid power controls, and 6 percent defense electronics. From 1963 to 1970, sales and earnings grew every year. At that time, more than 80 percent of the water treatment plants in the United States used some of the company's equipment and controls.
Expansion and diversification continued through acquisitions and internal expansion. A major acquisition made in the 1960s was that of ACF Industries Electronics Division. General Signal acquired eight companies between 1961 and 1966, focusing on the areas of electronics and electrical equipment. Social spending by the federal government was instrumental in the company's growth during this decade. General Signal's product line was dubbed "social capital goods" by the company's CEO, Nathan R. Owen. In 1969 General Signal won a contract in New York City to supply over $1 million in controls for new subway cars.
From 1970 to 1974, net sales more than doubled, rising from $206 million to $470 million. The company's net income also rose, from $9.4 million to $20.6 million. Markets were growing, and federal government contracts continued to be important markets for three key parts of General Signal's business—transportation controls, life safety, and building controls. Government contracts also supported environmental and industrial process controls, which were tied to petroleum, petro-chemicals, and chemical and mining activities.