Lehman Brothers Collection - Contemporary Business Archives

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Twentieth-Century Business Archives

Alco Standard Corp. - Lehman Brothers Collection

Alco Standard Corp.

List of Deals

The origins of Alco Standard date to 1952 with the incorporation of the Rainbow Production Company. It subsequently became Alco Oil and Chemical Corporation in 1956 after acquiring a company of that name. Initially, the company was engaged in the industrial chemical business. In an attempt to expand, Alco acquired several companies in the fertilizer, chemical, and agricultural products businesses during the late 1950s and early 1960s: Miller Chemical & Fertilizer, Union Fertilizer, Higgs & Young, and Goulard & Olena.

In 1965 Alco merged with V&V Companies, which had held a large investment in Alco since 1960. V&V was a holding company established by Tinkham Veale II and two associates. The new corporation was now renamed Alco Standard.

After the merger, Alco Standard began an ambitious acquisition program that would make it quite diversified in areas of manufacturing, mining, and distribution. Six companies were acquired in 1966, followed by five in 1967 and thirteen more in 1968. By 1969 Alco owned fifty-two companies in four different industries: chemical, electrical, metallurgical, and distribution. This last industry became Alco's largest and most profitable division through acquisitions in 1968 of the Garrett-Buchanan Company (a large Philadelphia paper merchant), Binghamton Paper Company, and the Monarch Paper Company. This acquisition program increased the reported net income significantly so that Alco could report in 1969 that profits for that year equaled the combined profits for the three prior years and that sales grew to more than $300 million from $35 million in 1965. The company also began trading on the New York Stock Exchange in 1965.

Alco continued adding companies in the 1970s and entered the resources field through the creation of a major group with coal-mining operations in Pennsylvania.

In 1970 Alco's distribution business became so large and successful that a separate operating company, Unisource, was created to coordinate the activities of all its distribution companies. The success of Unisource prompted Alco to move into other distribution areas in the 1970s and early 1980s, including specialty steel products, auto parts, liquor and glass containers, health supplies, and office products. By 1981 sales were $422 million and Alco comprised 134 companies.

By 1983 Alco found that while earnings continued to rise at a rate of at least 10 percent annually, profit margins and return on equity were falling. These problems were attributed to Alco's significant manufacturing subsidiaries that were not able to expand at the same rate as the other (mainly distribution) subsidiaries. As a result, Alco began a process of divesting and restructuring the company. These included merging many of Alco's smaller companies in 1984 into a single entity named Alco Industries and selling the company to it managers. In 1986 the new chairman, Ray Mundt, who succeeded Tinkham Veale, changed Alco Standard's focus to office products and paper distribution, cutting seven divisions, including health services and ice cream.

The last of Alco's diversified holdings were sold in 1993. During 1995 and 1996, Alco acquired ninety-seven companies, including Diversified Business Products, Alan Blaine Business Products, and UK-based copier distribution and service company Southern Business Group PLC.

Alco changed its name to IKON Office Solutions in 1997 and continued to aggressively pursue other companies, with 123 more acquisitions during 1997 and 1998.

In 2001 the company achieved sales of $5.3 billion and employed 37,600. While IKON continues to offer a large number of products and services, it is much less diversified than in years past and describes itself as a provider of products and services that help businesses communicate.

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