Borden (company)

Borden, Inc. was an American producer of food and beverage products, consumer products, and industrial products. At one time, the company was the largest U.S. producer of dairy and pasta products. Based in Columbus, Ohio, Borden focused primarily on pasta and pasta sauces, bakery products, snacks, processed cheese, jams and jellies, and ice cream. Its consumer products and industrial segment marketed wallpaper, adhesives, plastics and resins. In 1993, sales of food products accounted for 67 percent of its revenues. It was best known for its Elmer's Glue, Meadow Gold milk, Krazy Glue, and Borden Condensed Milk brands.

After significant financial losses in the early 1990s and a leveraged buy-out in 1995, Borden divested itself of its various divisions, brands and businesses. KKR shuttered Borden's food products operations in 2001, and divested all its other Borden operations in 2005.

Founding

The company was founded by Gail Borden, Jr. in 1857 in Connecticut as "Gail Borden, Jr., and Company." Its primary product was condensed milk. Struggling financially, the company was saved when Jeremiah Milbank, a railroad financier, agreed to invest. The company changed its name in 1858 to the New York Condensed Milk Company. The company prospered during the Civil War by selling condensed milk to Union armies.

Borden began selling processed milk to consumers in 1875, and pioneered the use of glass milk bottles in 1885."International Directory of Company Histories," Vol. 22, 1998.] Borden began selling evaporated milk in 1892, and expanded into Canada in 1895.

Growth

The company changed its name to the Borden Condensed Milk Company in 1899, and became the Borden Company in 1919. It expanded rapidly, buying numerous dairies, ice cream manufacturers, cheese producers, and mincemeat processors. Taking advantage of its many herds of cattle, the company became involved in rendering and the manufacture of adhesives. In World War II, Borden pioneered the American manufacture of non-dairy creamer, instant coffee and powdered foods.

Borden became a holding company in 1929, but its operations were re-unified in 1936 and its subsidiaries became divisions. Borden and other dairy companies were investigated in 1938 for violations of the Sherman Antitrust Act, but the charges were dropped after Borden signed a consent decree in 1940.

In the 1950s, Borden moved into the printing ink, fertilizer, and polyvinyl chloride (PVC) plastics business. By 1961, it was making 7 percent of all raw PVC in the United States. The company also went on a buying spree, swallowing up companies such as Wyler's (which made bouillon and powdered soft drinks), ReaLemon (manufacturer of synthetic and reconstituted lemon juice), Cracker Jack, Campfire brand marshmallows; Wise Foods (makers of potato chips) and Bama (makers of jellies and jams). By 1968, Borden's international chemical and petroleum divisions had grown so large that Borden created the Borden Inc. International division to manage them. The company owned the Danish company Cocio from 1976 to 1999.

Although Borden, Inc., retrenched in the inflationary 1970s, it embarked on a second wave of mergers and acquisitions in the 1980s. It purchased the Meadow Gold dairy products company, and the Prince pasta manufacturing concern (giving Borden 30 percent of the domestic pasta market). In 1987, Borden spun off some of its chemicals business in a public offering. Borden, Inc. retained a small financial investment in the new company, known legally as Borden Chemicals & Plastics Operating Limited Partnership (BCPOLP)

Demise

Borden suffered significant losses in 1991, 1992 and 1993. A 1991 restructuring failed to integrate the company's brands and marketing efforts. When whole milk prices dropped in 1992, the company did not lower its prices — causing a significant drop in market share from which it was unable to recover. Borden divested itself of nearly a third of its businesses in 1993 but could not find a buyer for its snack food concerns. In deep financial difficulty, Borden was bought out by Kohlberg Kravis Roberts (KKR) in 1995.

KKR increased the pace of divestiture, but was unable to right the company. The company's Borden/Meadow Gold Dairies subsidiary was sold in September 1997 to the Mid-America Dairymen (now the Dairy Farmers of America). Borden licensed the use of Elsie the Cow, but retained ownership of the trademark.Jensen, "Crackerjack Plan? Borden to Sell Some Food Brands," "Wall Street Journal," March 21, 1997.]

In 1997, KKR focused the company solely on its pasta and pasta sauces lines. But the new strategy failed as well. In June 2001, Borden Food sold several pasta lines to the American Italian Pasta Company and its pasta sauce and soup businesses to the H. J. Heinz Company. In July 2001, Borden Foods sold its remaining pasta lines to the New World Pasta Company.Buchanan, "Borden Foods Turns Out the Lights, Sells Final Holding," "Business First of Columbus," August 27, 2001.]

Borden, Inc. sold its final food product line, It's Pasta Anytime, to Kraft Foods in 2001 and shuttered its Foods division.

With the Chemicals business the sole remaining operating company, in 2001, KKR merged Borden, Inc. into Borden Chemical Inc., with the resulting company named Borden Chemical to emphasize the fact that Chemicals was the company's sole remaining product line. [ [http://sec.edgar-online.com/2004/03/29/0000013239-04-000007/Section2.asp Borden Chemical,Inc. 2004 Annual Report accessed April 19,2008] ]

In 2004, KKR sold Borden Chemical to Apollo Management, a private equity firm. Borden Chemical was merged with Resolution Performance Products, Resolution Specialty Materials, and the German firm Bakelite AG to form Hexion Specialty Chemicals. With the merger (which settled in 2005), the last vestige of Borden Inc. ceased to exist except as spin-offs and brand names. ["Apollo Buys Borden Chemical for $649 Million," "New York Times," July 7, 2004.] Hexion retains control over the Elsie the Cow trademark and Borden name. [ [http://tess2.uspto.gov/bin/showfield?f=doc&state=ino1ll.3.16 "Elsie Borden." Trademark Nos. 77034096; 77104776; 76591578; 3271334. United States Patent and Trademark Office. July 31, 2007.] ]

Notes

References

*"Apollo Buys Borden Chemical for $649 Million." "New York Times." July 7, 2004.
*Buchanan, Doug. "Borden Foods Turns Out the Lights, Sells Final Holding." "Business First of Columbus." August 27, 2001.
*"International Directory of Company Histories." Vol. 22. Farmington Hills, Mich.: St. James Press, 1998. ISBN 1558623639
*Jensen, Elizabeth. "Crackerjack Plan? Borden to Sell Some Food Brands." "Wall Street Journal." March 21, 1997.

External links

* [http://www.hexionchem.com/ Hexion Speciality Chemicals Web site]
* [http://www.porticus.org/borden/borden.htm Borden Historical Documents Page]