The Dexter Corporation

1847–1988

With a history that stretches back over two centuries, The Dexter Corporation is the oldest company listed on the New York Stock Exchange. Founded in 1767, the firm was owned and operated by members of the same family until 1988. Dexter originally comprised a saw and grist mill, then expanded into the manufacture of specialty papers. Having diversified and grown internationally in the latter half of the twentieth century, the company concentrated on the aerospace, automotive, electronics, food packaging, and medical markets in the early 1990s.

When Thomas Dexter, an educated scholar and a farmer, arrived in America in 1630, he came determined to make his fortune. By the time he died in 1677, he had amassed a significant farming estate. In the early 1700s, Seth Dexter, Thomas's great-great-grandson, settled in the area now known as Windsor Locks, Connecticut, and started a clothing business. In 1767, Seth's son, Seth II, a wealthy clothier, bought 160 acres of timberland and a saw mill, and founded the company today known as the Dexter Corporation. In 1784, with the help of his brother-in-law and business partner, Jabez Haskell, Seth II built a grist mill and annexed it to the company.

Soon Seth II's son, Charles Haskell Dexter, joined his father's business, and C. H., as he was known, began paper making experiments, where he successfully made wrapping paper from Manila rope by employing the waste power from the mill. The discovery yielded little or no remuneration at the time, but laid a foundation for future products. With his brother-in-law, Edwin Douglas, a noted engineer, C. H. Dexter reorganized the business under the name C. H. Dexter & Company in 1847. When Douglas left, Dexter continued to operate the company alone. C. H. made the company self-sustaining, while simultaneously helping to increase his hometown's water power and industrial versatility.

In 1867, C. H. Dexter brought his son, Edwin, and two sons-in-law into the business, changing its name to C. H. Dexter and Sons. One of the sons-in-law, Herbert R. Coffin, assumed supervision of the paper mill and made it a principal part of the company. In 1873 a fire severely devastated a large portion of the paper mill, but by 1875 a new mill, equipped with up-to-date machinery and a solid brick structure, was built and in operation. When Edwin Dexter died in 1886, Herbert R. Coffin assumed full control of the property and the business. He improved the company's products and distribution, which led to increased sales.

After Herbert Coffin's death, his two sons, Arthur and Herbert II, operated the business as a partnership. Following incorporation in July of 1914, Arthur D. Coffin became president and Herbert II became vice-president. In 1922, Arthur Coffin hired a young M.I.T. graduate, Fay Osborn, who played a principal part in the development of the porous long fiber tea bag paper which Dexter introduced in the 1930s. This same technology led to the development of the fibrous meat casing, as well as the stencil base tissue, and a general line of absorbent and filter paper still being produced and developed in the late twentieth century.

In 1973 the company bought Puritan Chemical Company, maker of chemical specialties for the sanitation industry, for $6.9 million.

1936–1985

Innovation and experimentation led Dexter to the forefront of new paper products. Dexter marketed the first packaged sheet of toilet paper, which was sold with a wire loop so that it could be hung on a convenient hook or nail. The toilet paper came in two grades, but was discontinued in the early 1930s. The company also introduced the first catalogue cover paper, as well as the "electrolytic absorbent capacitor" paper, and patented a metal tarnish preventative tissue which sold extensively to the silverware manufacturers.

In 1936, when Arthur's son, Dexter, became president of the company, its main products were short fiber paper products, such as carbonizing tissue, lightweight air mail writing papers, and condenser tissues for the electrical industry. The company produced long fiber paper only on a limited basis. Under Dexter Coffin's administration, however, the company devoted 100 percent of its production to long fiber paper and webs for industrial uses.

By the time David L. Coffin became Dexter's president in 1958, the company had gained a reputation as being a stodgy old New England relic that was nearly stagnant. The company produced only paper products, opposed hiring from outside the Windsor Locks area, and prohibited borrowing from lending institutions. It lacked an organized sales force, and almost one-third of its personnel was 65 or older. To modernize the company's approach to business, David Coffin hired young professional managers and restructured the family-controlled executive board to include outsiders. He instituted strong cost controls, and trained and organized a sales force. (Coffin had himself started out as a salesman for the company in 1948.) He also established a plan for acquiring and divesting companies to achieve growth. Coffin's target was the field of specialty chemicals. In 1958 the Dexter Corporation acquired the assets of Standard Insulation Company, manufacturer of laminates, pre-impregnated products, and closure materials. Dexter sold Standard, however, when the company decided to narrow its focus to the area of specialty formulators of industrial finishes. Dexter bought Chemical Coatings Company in 1961, Lacquer Products Company in 1962, and Midland Industrial Finishes Company in 1963.

In 1967, on its 200th birthday, the Dexter Corporation offered its shares to the public. With this new capital, the company embarked on a path of mergers and acquisitions. In November of 1967, the company merged with Hysol Corporation (currently a division of the company). In 1973 the company bought Puritan Chemical Company, maker of chemical specialties for the sanitation industry, for $6.9 million. Dexter purchased Howe and Brainbridge Inc. for $11.1 million in 1976, and acquired Mogul Corporation for $50 million in 1977. In 1981 Dexter purchased Fre Kote Inc., a plastics release agent firm, and merged it with the Hysol Division. In 1983 the company acquired Bethesda Research Labs and merged it with the GIBCO Corporation (formerly a wholly owned subsidiary) to form Life Technologies, Inc., whose major product is a DNA-based test to determine the presence of cancer in the cervix.

In 1985 the company launched a two-year restructuring program, New Directions, intended to stimulate productivity and ensure a healthy return on investments. The company became more centralized, divested its low-margin holdings, and sought new areas of investment in materials technology and development. Dexter targeted seven main business areas it planned to enter: specialty thermoplastics, high performance formulated chemicals, advanced composites, specialty materials for packaging, specialty industrial services, environmental services, and biotechnology supplies and products. To build on its existing business, Dexter acquired several businesses in the areas of advance composites, with applications in both the aerospace and housing industries (the tough plastics are used as frames and moldings for windows because they do not conduct heat), as well as specialty thermoplastics targeted for the automotive industry (the light-weight durable plastics replace metal parts in cars).

1985–1993

In 1985 Dexter's Hysol Division, producer of epoxies, Courtaulds PLC of Britain, a pioneer in the development of carbon fibers, and several other investors joined to form Hysol Grafil Composite Components Company (HGCC), a small custom molder of high-tech aerospace and defense parts. HGCC's biggest markets are the large aerospace engine manufacturers, such as General Electric Company. Dexter and Courtaulds shared a 50-50 investment in research, development, and marketing in the company. HGCC, one of only eight companies licensed to produce the aerospace resin patented and licensed by the National Aeronautics and Space Administration, was the first to sell this resin in liquid form.

The federal government selected Dexter to supply carbon fiber and resin to major defense contractors competing for contracts to manufacture the government's new LHX helicopter. The company currently supplies the industry with other products, such as adhesives used in McDonnell Douglas AH-64 Apache helicopters.

The purchases of Research Polymers International (RPI), a leading manufacturer of thermoplastic polyolefin compounds, in September of 1986, and Rutland Plastics, a specialty plastics firm, in December of the same year, signaled Dexter's entrance into the high-performance thermoplastics market. Rutland, a leading manufacturer of plastics screen inks primarily for use with textiles, was one of only a few companies to serve the automotive market with specialty plastics. The company divided its thermoplastics businesses into two divisions in order to focus on different market segments. RPI/Dexter directed its attention to automotive plastics, while Dexter Plastics concentrated on the medical, appliance, and electrical markets. Plastics comprised 20 percent of Dexter's $650 million sales by the mid-1990s.

By 1988, the New Directions program had seen the divestment of about 13 businesses and the acquisition of 13 new interests. That year, the corporate restructuring culminated in a management shift the likes of which Dexter Corporation had never experienced. After over 220 years under the leadership of a descendant (by blood or marriage) of Thomas Dexter, K. Graham Walker was selected to succeed David L. Coffin as The Dexter Corporation's president and chief executive officer. Although it was a profound event in the company's history, the transition from family administration did not bring the immediate, drastic organizational change that some might have expected.

For two years, Walker essentially continued the strategy of his predecessor, watching for likely acquisition and divestment targets. Then, in 1990, the new leader announced a comprehensive restructuring that would extend from the roster of businesses to operations and even to the corporate culture. The three-year plan traded lagging (but often not losing) holdings for increasingly "upstream" businesses. In 1992 and 1993, the company completed the sales of its water management, composites, plastisols, and pultrusions businesses. New interests included a strategic joint venture with the Netherlands company Akzo Coatings International B.V. wherein Dexter traded its North American coil coatings business for its partner's aerospace coatings interests in the Americas. The two companies mutually financed a joint aerospace coatings venture in Europe. The 1993 acquisition of Vernicolor A.G., of Switzerland, helped better position Dexter in the European food packaging market. Overall, the restructuring reduced Dexter's operating divisions by half.

1992–1994

Internal aspects of the early 1990s restructuring included an analysis and revision of Dexter's executive pay plan by the Hay Group, pioneers in the field of compensation. They recommended linking incentives more closely to performance objectives. Workforce reductions eliminated 16 percent of the company's total payroll. An employee empowerment plan gave the remaining manufacturing personnel more training, as well as more control over their work environments. These changes in Dexter's corporate culture helped decrease rejects and accidents as well as overhead. The company included certification with the International Standards Organization as one of the qualifications for reaching its goal of becoming a "preferred supplier" to its increasingly global customers.

In the midst of the restructuring, Dexter endured a $7 million loss that was partially attributable to the multi-million settlement of environmental litigation regarding its Windsor Locks nonwoven fabrics plant. After declining slightly from 1992 to 1993, the company's annual revenues rose to $974.72 million and net income recovered somewhat to $38 million in 1994.

In the years following Dexter's reorganization, CEO Walker hoped to continuously improve financial performance through a variety of strategies. He planned to invest operational savings into increased research and development with a goal of originating the proprietary technology that could carve out a profitable niche for the company. Dexter would also continue to seek key niches in its chosen markets, promote synergy among divisions, and focus international growth on Europe and Asia. Other long-term goals included: boosting annual earnings per share, increasing profitability, and keeping long-term debt under 35 percent of capital.