Fisher Scientific

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Fisher Scientific

One Liberty Lane
Hampton, New Hampshire 03842
U.S.A.
(603) 926-5911
Fax: (603) 926-5661
Web site:http://www.fishersci.com

Public Company
Incorporated: 1902 as Scientific Materials Company
Employees: 7,000
Sales: $2.18 billion
Stock Exchanges: New York
Ticker Symbol: FSH

SICs: 5049 Laboratory Equipment

Fisher Scientific International Inc. is the world leader in serving science. Reaching out to some 150,000 customers worldwide, Fisher operates as a one-stop source for the scientific and laboratory needs of its customers in research, healthcare, industry, education, and governments around the world. The company offers more than 245,000 products from 3,200 manufacturers and leading brands of scientific instruments, research chemicals, diagnostics, and laboratory supplies. Fisher manufactures many of the products it distributes and offers services ranging from an Internet mall and high-performance transaction-processing software to the design, construction and equipping of turnkey laboratories, The company also provides integrated-supply services for procurement of MRO products. Self-manufactured and proprietary products account for about 40 percent of Fisher’s sales. The company’s three largest markets are those of scientific research, U.S. clinical-laboratory testing, and safety. In 1992 Fisher Scientific International Inc. became the first American producer of reagents and fine chemicals to have its facilities ISO-9000 certified. Ranked by sales, Fisher is the second largest public corporation in New Hampshire, according to a 1997 N.H. Business Review survey.

Founding and Early Years: 1902-50

At the beginning of the 20th century, the United States was becoming an industrial nation. In Pittsburgh, Pennsylvania, Chester G. Fisher—a 20-year-old engineering graduate of Western University of Pennsylvania, recognized the need for a company that would supply scientific tools for the city’s many industries, especially the burgeoning steel business. He bought the stockroom of the Pittsburgh Testing Laboratories, which served as Western Pennsylvania’s only source of laboratory supplies. Fisher dreamed of realizing the ideal expressed by French scientist Louis Pasteur: “Take interest in these sacred dwellings which we call laboratories. There it is that humanity grows greater, stronger, better.” In 1902, the young engineer founded the Scientific Materials Company, the first commercial source of equipment and reagents for the region’s laboratories. In the early 1900s, laboratory work consisted mainly of simple volumetric and gravimetric analysis; since very little instrumentation was available, chemists depended primarily on their eyes for analysis. Fisher’s earliest products, such as microscopes, burets, pipettes, litmus, balances, and colorimeters, allowed for better visual analysis. These tools were state-of-the-art in those days and, though relatively crude by contemporary standards, were the foundation for Fisher Scientific International Inc.’s technical leadership in serving science.

In 1904 Chester Fisher published the 400-page Scientific Materials Co. Catalog of Laboratory Apparatus & Supplies, illustrated with handmade woodcuts and featuring standard laboratory supplies as well as dissecting sets encased in Moroccan leather and anatomical models of the eye, the ear, and the heart. Later this catalog evolved into the Fisher Catalog, the company’s most famous marketing tool. This biennial product reference became the industry standard as both a buying guide and a source of product specifications and technical information. The electronic edition available on the company’s web site was the industry’s most comprehensive source for laboratory equipment and supplies, including apparatus, instrumentation, disposable lab supplies, glassware, chemicals, safety supplies, laboratory workstations, and specialized products for biotechnological, clinical, chromatographical, and environmental applications.

When World War I cut the company off from its European suppliers, Scientific Materials set up its own research, development, and manufacturing capabilities. The company’s earliest manufactured products proved to be superior to those formerly imported from Europe. For example, Scientific Materials’ electric-combustion furnace and combustion train for analyzing carbon levels in steel was the first of its kind, as was the electrically heated and thermostatically controlled bacteriological incubator that replaced the erratic gas-flame German incubator.

Furthermore, when the United States entered World War I, Chester Fisher made his company the first home of the U.S. Chemical Warfare Service and rushed an entire American Expeditionary Force Research Laboratory to the front lines in France to help the Allies defend themselves against gas warfare. Another landmark event was the invention of the Fisher Burner, which Ernest Child, in his book titled Tools of the Chemist: Their Ancestry and American Evolution, hailed as “the most significant development in burners since the original Bunsen burner.” Other early inventions included a unitized system for gas analysis and an electromagnetic instrument for rapid determinations of carbon in steel. Then, in 1925, the company transcended its regional markets by purchasing Montreal-based Scientific Supplies, Limited. In 1926 Chester Fisher renamed his company Fisher Scientific Company to differentiate it from new companies with “generic” names.

In 1940 Fisher acquired Eimer & Amend (a New York-based chemical company for which Scientific Materials had once been an agent), and took over its laboratory-supply business and manufacturing of fine chemicals. Fisher Scientific established a sound reputation for its quality chemicals. It supplied chemicals used in the U.S. government’s top-secret Manhattan Project for producing the world’s first atomic bomb. According to company archives, in 1947 Chester Fisher was given the Award of the American Chemical Society by its Pittsburgh Section. His contributions were summarized in this way: “The nation and much of the world owe a debt to C. G. Fisher .... A bit of C. G. is in most of the world’s steel. The aluminum wings of man carry their loads more effectively because of him. Our foods are safeguarded... our farm soils maintained. .. our hospitals work more effectively ... virtually no phase of modern life exists that has not been influenced or touched by some product of the Fisher Company.” Chester Fisher served 47 years as company president before he became chairman in 1949 and was succeeded by his son Aiken W. Fisher.

Inventions, Acquisitions, and Restructuring: 1951-91

As a manufacturer, Fisher set a new industry standard in 1954 when it introduced volumetric packaging, that is, the packaging of liquid chemicals based on volume rather than on weight. This method of packaging resulted in better use of storeroom space, easier ordering, and cost savings. Volumetric packaging was quickly adopted by other chemical manufacturers. As a quality supplier to the medical market, Fisher provided the reagents used by Dr. Jonas Salk to develop the polio vaccine introduced in 1955. By 1961 the incidence of polio had dropped by 95 percent. Company acquisitions continued apace with the 1957 purchase of New York-based E. Machlett & Sons, which specialized in medical apparatus and supported critical medical research, including early cancer investigations.

Then Fisher Scientific established the Instrument Division to manufacture laboratory supplies ranging from complex optical -electronic instrumentation and automatic freeze-dryers to precision-scaled atom models. In 1965 the company introduced the Differential Thermalyzer, an automatically programmed system for conducting differential thermal analysis. According to the company’s web site, Chemical & Engineering Atews—the official publication of the American Chemical Society—called the product “a real price breakthrough,” noting that this $950 Fisher product replaced instruments typically selling for $4,000 to $8,000. And the industry magazine Industrial Research named the Differential Thermalyzer one of the 100 most significant new technical products of the year. Another significant event was the 1962 installation of an IBM computer system to record and track inventory levels for more than 40,000 items. By June 1970 all U.S. Fisher branches were linked to this system, thereby providing immediate control of inventory information.

In 1965 Chester G. Fisher died and was succeeded by his son Aiken as chairman of Fisher Scientific; another son, Benjamin, became the company’s president. Chester had seen his company grow from a regional laboratory supply company, staffed by six employees in a Pittsburgh warehouse, to a leading position in manufacturing and distribution of scientific products and supplies, with $58 million in sales and close to a million customer transactions. The company went public in 1965 and was listed on the New York Stock Exchange in 1968.

Company Perspectives

Fisher Scientific International Inc. is committed to serving science. The company’s global logistics infrastructure and distribution expertise, ability to source products around the world, alliances with third-party suppliers, and integrated supply of maintenance, repair and operating (MRO) products will continue to expand the Fisher franchise as the supplier of choice for demanding customers around the world.

With the acquisition of Pfeiffer Glass, Inc. in 1966, Fisher added the capability of mass producing accurate pipets for many laboratory applications. Fisher pipets became—and remained—the industry standard. That same year Fisher’s Photometric Titralyzer helped to change the way scientists did their jobs: it could analyze 15 successive samples and print out the results. The industry journal Industrial Research cited the Photometric Titralyzer as one of the 100 most significant new technical products of 1966. A similar honor went to the company’s 1968 Hem-alyzer, which provided printed information about a patient’s hemoglobin content, as well as red and white blood-cell counts, in 96 seconds. Then, following the 1968 purchase of Massachusetts-based Jarrell-Ash Company, Fisher was able to design and manufacture sophisticated optical instrumentation—particularly in the fields of emission and atomic absorption spectroscopy.

Fisher Scientific entered the educational marketplace in 1967 with the acquisition of Stansi Scientific Company, a Chicago manufacturer and distributor of equipment for teaching science in elementary and secondary schools, colleges, and universities. Nine years later, the Nigerian Ministry of Education chose Fisher Scientific from among 40 different organizations around the world to support education programs for life and physical sciences. Fisher, chosen for its competitive prices, complete product lines, and ability to fill the total order in just nine months, sent 16 chartered cargo jets carrying nearly 100,000 pieces of teaching equipment to Nigeria. At $8.75 million, this was a record-setting order in Fisher’s 74-year history. Years later, Fisher shipped a large quantity of scientific supplies to Kuwait to re-equip 80 laboratories of colleges and institutes ravaged by the Persian Gulf War.

During the 1970s, Industrial Research magazine placed two other Fisher inventions among the top 100 most important technical products of the year: the Autotensiomat, a fully automated surface-tension-measuring instrument that could be used on most liquids; and the Model 750 AtomComp, a computer-controlled, direct-reading spectrometer that was the first commercially available instrument of this type. To ensure that its millions of instruments in the field worked at peak efficiency, in 1976 Fisher Scientific established an Instrument Service Division having 11 service centers across the nation; the division installed new equipment and trained laboratory personnel in its use.

For 73 years Chester Fisher’s scientific company was headed by either himself or one of his sons. In 1975 Aiken retired as the company’s chairman and was replaced by his brother, Benjamin Fisher. Edward Perkins became the first non-family member to be named president and chief executive officer. He held that position until the company was acquired by Allied Corporation in 1981.

For the next decade, the company operated as a subsidiary of Allied Corporation, successor AlliedSignal Inc., and The Henley Group—an Allied Signal spinoff. In 1982 Fisher chemicals were an integral component of the in-flight battery power system for the Columbia space shuttle, which was launched for its fourth mission June 27. Fisher provided 55-gallon drums of chemicals for the 1984 development of Nova, the world’s largest and most powerful laser, housed in four rooms of the Lawrence Livermore National Laboratory in Livermore, California. To meet the growing needs of scientists in biotechnology, biochemistry, and related fields, in 1985 Fisher established a Biotechnology Division. With unique products—such as Promega molecular biologicals and Mediatech bacteriological culture media—Fisher BioTech sales grew more than 30 percent annually for the next eight years. In 1988 Fisher patented its Code-On technology, a spectacular new use of automation in molecular histopathology; during that year more than 150 Code-On units were installed in laboratories throughout North America. At year-end 1991 The Henley Group sold a 57 percent interest in Fisher through a public stock offering. The public entity emerged as Fisher Scientific International Inc., based in Hampton, New Hampshire. Fisher Scientific Company remained in Pittsburgh as an operating subsidiary.

Worldwide Expansion and Electronic Commerce: 1992 and Beyond

Henley President Paul M. Montrone became president and chief executive officer of Fisher Scientific International in 1991 and chairman in 1998. David T. Delia Penta became president and chief operating officer in 1998. Fisher, in 1992, became the first American producer of reagents and fine chemicals to have its facilities ISO-9000 certified by the Geneva, Switzerland-based International Standards Organization, which based certification on a common set of manufacturing, trade, and communication standards. ISO-9000 Certification is the worldwide standard measurement of total quality management. Fisher won a seven-year, $150 million contract with the University of California; research centers on nine of the university’s campuses were linked directly to Fisher via some 50 remote-order stations and advanced electronic data systems.

Throughout the 1990s Fisher experienced dramatic growth both nationally and internationally through strategic acquisitions and mergers, joint ventures and alliances, expansion of current lines, additions to its product portfolio, and the development of its global distribution network. For instance, the purchase of Hamilton, the premier American designer and manufacturer of laboratory workstations, led to the merger of Fisher’s existing laboratory-furniture capability with Hamilton to form Fisher Hamilton Inc., the world’s largest manufacturer and supplier of laboratory workstations, even providing experts for design, budgeting, and project coordination.

In 1993 and 1995 Fisher completed two major laboratory-renovation projects in Russia in collaboration with one of the company’s dealers, Intertech Corporation of Atkinson, New Hampshire. In early 1997 Fisher received a $400,000 grant from the U.S. Trade and Development Agency as partial funding to conduct a feasibility study for the development of a $10 million state-of-the-art laboratory in Moscow. The laboratory, the first of its kind in Russia, was to test and certify pharmaceuticals for the Russian Federation’s Ministry of Health and Medical Industry, which is similar to the U.S. Food and Drug Administration. Fisher worked with personnel of the Food and Drug Administration and sent a team of engineers, architects, and designers to Moscow to evaluate the proposed site of the laboratory. Both the United States and Russian governments were expected to provide financial support for implementation of the project.

The acquisition of the organic-chemicals business of Eastman Kodak Company and of Belgium-based, industry-leader Janssen Chimica allowed Fisher to add a strong new component to its international chemical operations by merging the two product lines to form Acros Organics. Curtin Matheson Scientific, a leading supplier of diagnostic instruments, tests and related products, was integrated into Fisher’s clinical-laboratory operations to form CMS/Fisher HealthCare. And a strategic alliance with Bedford, Massachusetts-based Millipore Corporation allowed Fisher to distribute Millipore laboratory filtration products in the United States, Puerto Rico, and Canada.

Aiken Fisher, the company’s second president and chairman of the board, died in 1996. During his 50-year career at Fisher, he had seen the company become a leading supplier of scientific and laboratory products. His contemporaries attributed his effective leadership to a deep understanding of the business, common sense, unfailing civility, and commitment to continuing innovation.

The acquisition of Kühn + Bayer—a leading German provider of scientific equipment and supplies to more than 4,000 customers from Central Europe to Moscow—represented Fisher’s first equity investment in Europe. This company was later merged with another Fisher subsidiary, Udo Fleischhacker GmbH & Co. KG, to form Fisher Scientific GmbH, which served as an automated distribution center and sales operation in Germany. Similarly, in the Netherlands two Fisher subsidiaries were combined to form Fisher Scientific of the Netherlands B.V., and in the United Kingdom, two other Fisher subsidiaries were consolidated as Fisher Scientific UK, the largest Fisher subsidiary in Europe. Other acquisitions included Singapore-based Fisher General Scientific Pte Ltd and Malaysia-based Fisher Scientific Holdings (M), which exported to China, India, Thailand, Vietnam, Brunei, and other Asian markets.

Global Electronic Commerce: Toward a New Millennium

Chester Fisher’s company pioneered as a distributor of scientific supplies. As early as 1904 he published an illustrated catalog to facilitate ordering of the company’s laboratory apparatus and supplies. In 1962 an IBM computer recorded and tracked inventory levels for some 40,000 items; by mid-1970 all the U.S. company’s branches were linked to Fisher “Fastback,” the industry’s first real-time computer system. In 1978 Fisher installed computer terminals at its major customers’sites, enabling them to place orders directly and to receive immediate order verification printouts, as well as information on their past purchases and account status.

During the 1990s, Fisher established itself as an industry leader in electronic commerce by extending the company’s historical technology in inventory management and procurement systems. Search, retrieval, order-management and transaction-processing functions were added to Fisher’s Internet site. CornerStone software allowed buyers and suppliers to create public or private Web sites to support their business-to-business transactions. ProcureNet, a public mall owned and operated by Fisher, gave the general commercial community access to Fisher electronic catalogs and those of other suppliers. In 1997 the Internet & Electronic Commerce Conference, organized by The Gartner Group, recognized ProcureNet as “the first public electronic mall for business-to-business transactions” and awarded Fisher Scientific the iEC Award for the Best Internet Infrastructure.

The company’s distribution network comprised 32 locations in the United States, including a national distribution center in Somerville, New Jersey, four regional centers (New Jersey, California, Illinois, and Georgia), and 27 local facilities throughout the United States. Fisher Scientific also had two centers in Canada, and one each in Germany, France, England, Belgium, Singapore, Korea, Malaysia, Mexico, and Australia.

The company distributed an average of 20,000 items every business day, with products accounting for more than 90 percent of total 1997 sales shipped to customers within 24 hours of being ordered. By year-end 1997, Fisher Scientific’s sales had increased to $2.18 billion, compared with $757.7 million in 1991, the year Fisher Scientific International Inc. became a public company. Sales had increased every year since 1954, when revenues were only $2.1 million.

In January 1998, Fisher Management and an investor group led by Thomas H. Lee Company completed a $1.4 billion recapitalization of Fisher Scientific. According to Elisabeth Kirschner’s story in Chemical & Engineering News, this action followed an unsolicited 1997 proposal from the company’s former largest shareholders, the Bass brothers of Texas, who were seeking to recapitalize or take over Fisher. In an introduction to Fisher’s 1997 annual report, President Paul M. Montrone wrote that 1997 was a challenging time for the company, “which did not sustain the sales and income trends of previous years.” He pointed out that continuing costs associated with consolidation and restructuring, market dynamics, and the 16-day strike against United Parcel Service (responsible for over 60 percent of Fisher’s domestic deliveries) affected results.

Although “total results in 1997 were not strong,” wrote President Montrone, “a number of business units performed well.” Fisher Hamilton, the manufacturer of laboratory workstations and fume hoods, registered significant growth with new products and the initiation of buying alliances with major pharmaceutical customers. Fisher Safety, one of the fastest-growing units, won a multimillion-dollar contract for clean-room supplies and services at Texas Instruments Inc. Fisher Laboratory Products posted strong gains and successfully launched a new line of pH meters that are programmable in any language; and Fisher Technology gained strong partners in electronic commerce through new marketing agreements with IBM Corporation and Oracle Corporation. Furthermore, since its initial public offering in 1991, the company increased shareholder value over 22 percent per year and demand remained strong for Fisher-manufactured products.

In short, as the 21st century drew near, it seemed possible to affirm that Fisher Scientific International Inc. would remain a driving force in the service of science and keep as its trademark the words founder Chester Fisher had gleaned from Louis Pasteur: ’Take interest in these dwellings which we call laboratories. There it is that humanity grows greater, stronger, better.”

Principal Subsidiaries

Acros Organics N.V. (Belgium); Fisher Chimica N.V. (Belgium); Fisher Hamilton Inc.; Fisher Scientific B.V. (Netherlands); Fisher Scientific Company L.L.C.; Fisher Scientific GmbH (Germany); Fisher Scientific Holding Company; Fisher Scientific Holdings, S.A. (France); Fisher Scientific Holding U.K. Limited; Fisher Scientific Limited (Canada); Fisher Scientific of the Netherlands B.V.; Fisher Scientific S.A. (France); Fisher Scientific U.K., Limited; Fisher Scientific Worldwide Inc.; Fisher Technology Group Inc.; Kiihn + Bayer GmbH (Germany); Orme Scientific Limited (U.K.); Resco Trade N.V.; Strategic Procurement Services Holdings Inc.