It would be interesting to see a chart on Industrial when it was trading on the Nasdaq.
OAKDALE -- In an unusual reversal, Industrial Scientific Corp. announced this week that it is going private.
The company, a designer, manufacturer and marketer of gas monitoring systems and instruments, went public in 1993. After more than five years of uninspired stock results, the majority shareholders plan to buy back outstanding stock at $28.50 a share.
The stock traded at $20.50 before the announcement.
The McElhattan family already held 67.7 percent of the outstanding shares of common stock.
Kent McElhattan, president and CEO, said public ownership did not mesh well with the company's philosophy.
"We manufacture life-preserving products. We can't make mistakes," he said. "That is in conflict with the expectations of public financial markets for sales and earnings growth at any cost. We're opting out of the public arena in order to serve our customers better."
In 1993, when ISC was 8 years old, it went public in part to offer stock options to employees. But the stock's performance diluted the benefit of that option, he said.
"Our stock did not appreciate as fast as we thought it should, so our employees did not realize the financial gains we'd hoped," Mr. McElhattan said.
"It's disturbing," he said. "Our employees worry about what's wrong, but there's nothing wrong. We're just not meeting Wall Street expectations of 20 percent annual growth."
Employee stock options will also be bought out and totally vested by the company's move to private ownership.
Bob Kanters, senior vice president of Downtown brokerage Legg Mason Wood Walker Inc., said it is very unusual for public companies to revert to private ownership. Now, he said, the company will not have to be concerned with investor relations to try and improve the stock's performance.
Before deciding to withdraw from public trading, ISC formed a special independent committee to look out for the interests of the company's nonmajority shareholders. To execute the change, a new corporation was formed, ISC Acquisition Corp., which is wholly owned by majority shareholders. The move private will happen through a merger agreement between ISC and ISC Acquisition.
Now that the majority shareholders have made the offer to buy back stock, the company will file an information statement with the Securities and Exchange Commission. After a 30-day review period, some changes may be made to the statement. Then, the proposal will be mailed to all the stockholders 20 days prior to closing of the merger.
