Christian Dalloz SA
Christian Dalloz SA
Sales: EUR 256.3 million (FFr 1.68 billion) ($240 million) (2000)
Stock Exchanges: Euronext Paris
Ticker Symbol: DAL
NAIC: 339113 Hard Hats Manufacturing; 339115 Ophthalmic Goods Manufacturing; 327215 Glass Product Manufacturing Made of Purchased Glass
Christian Dalloz SA is one of the world’s leading manufacturers of protective equipment for the work environment. The company and its subsidiaries produce safety and protection products ranging from eyewear to fall protection equipment; through its Sunoptics subsidiary, the company also produces lenses for sunglasses. Based in France’s Jura region, Dalloz has built up a diversified, international portfolio of subsidiaries and products, including: WGM Safety Corp., based in the United States; Bilsom, based in Sweden; the company’s founding Christian Dalloz Sunoptics operations in France; and such late 1990s and early 2000s acquisitions as Germany’s Söil, the European leader in high-access equipment; and Fendall Company, based in the United States, the world’s leading manufacturer of portable emergency ocular wash equipment, acquired in August 2000. More than 95 percent of the company’s annual sales, which topped EUR 250 million in 2000, come from the United States and Europe. The United States accounts for the largest share of sales, at 64 percent. Fall protection products represent the largest single product category, at 40 percent of the company’s sales, while head protection—including hearing protection, protective filters, eye protection, and hard hats and other head protection—combines to contribute 57 percent of sales. The company’s Sunoptics sunglass lenses add just 3 percent to Christian Dalloz’s revenues. Listed on the Euronext Paris stock exchange, the company remains majority controlled by holding company Financière Christian Dalloz, itself held by Ginette Dalloz, widow of the company’s founder, and French optical products manufacturer Essilor.
Plastics to Polycarbonates in the 1960s
Christian Dalloz established the company that was to bear his name in 1958 as a small manufacturer of injection-molded plastic products. During the 1960s, however, the company began to specialize in eyewear, particularly sun protection lenses. Developing its own lenses, Christian Dalloz launched its first organic lenses in 1970. In the early 1970s, however, the company’s development interests turned toward new, stronger polycarbonate materials. The company’s research and development efforts enabled it to trademark its own Cridalon polycarbonate. Dalloz’s lenses were quickly adopted by many of the leading sunglass manufacturers. The company continued to develop new features and specifications to maintain its position as a high-end provider of sunglass lenses. In 1982, Christian Dalloz introduced a new anti-scratch protective coating.
The company remained modest-sized into the mid-1980s. In 1985, however, the company laid out a new growth strategy based on the diversification of its product lines and the internationalization of its activity. The company’s polycarbonate lenses and its background in sun protection led it to look for growth in the work safety equipment market. Christian Dalloz also made its first foreign moves, setting up a new subsidiary, Société Tunisienne de Lunetterie, giving it a foothold in French-speaking North Africa.
To fund its expansion moves, Christian Dalloz went public in 1986, listing on the secondary market of the Lyons stock exchange. That listing was later transferred to the Paris stock exchanges, after France’s regional stock exchanges were merged into the Paris Bourse, which itself became part of the Euronext stock exchange partnership at the end of the century. Joining the company was another fast-growing, and closely related, French company, Essilor International. The two companies entered a strategic agreement, giving Essilor a minority stake in Christian Dalloz, with an option to take over the company after founder Dalloz, who had no children, retired. Meanwhile, Christian Dalloz, which sought to expand deeper into the occupational safety sector, began preparing to make an acquisition that was to transform the company into an important player in a soon-to-be consolidated global industry.
That acquisition came in 1989, when Christian Dalloz made a successful bid to acquire 100 percent of WGM Safety Corp. in the United States. The acquisition of the far larger, and more diversified, company gave Christian Dalloz immediate access to the vast North American market, the largest market for occupational safety equipment. The WGM Safety acquisition gave the company a line of products including fall protection equipment, such as harnesses and straps; protective gloves and shoes; hard hats and other protective headgear; breathing filters and equipment; and ear protection, under the well-known Miller and Willson brands.
Not only did the WGM purchase greatly expand Dalloz’s arena of operations, it also shifted the company’s geographical focus—by 1990, more than 90 percent of the company’s revenues came from North America. The company also had taken a prime place in the worldwide safety equipment market, with revenues boosted to past FFr 350 million. The WGM purchase had other repercussions for Christian Dalloz, particularly in the creation of a new holding company, Financière Christian Dalloz, in which Essilor took a one-third minority stake.
The far larger company almost immediately stubbed its toe. The beginning of a recession in the United States, further exacerbated by the outbreak of war in the Persian Gulf, saw the company extremely exposed to the collapse of its U.S. market. With its revenues slipping some 40 percent, and profits plunging as well, the company also faced a huge debt burden—much of which was subject to an 11 percent interest rate. At the same time, Dalloz attempted to enter a new market, turning its expertise in manufacturing lenses to making intra-ocular implants in 1991. This move required the company to invest heavily in new manufacturing equipment, as well as in marketing and distributing its new line of products. Yet the company’s entry proved ill-timed, as competition and other factors sent prices for ocular implants into a downward spiral. Dalloz was forced to exit that market by 1992.
By then, Dalloz also marred by tragedy, after founder Christian Dalloz was killed in an automobile accident in May 1991. The company fell into the hands of Dalloz’s widow, Ginette, who took up a temporary position as company president. Soon after, the company named a new president, Philippe Alfroid, to continue its late founder’s drive for expansion. Despite the company’s troubles at the start of the decade, its long-term prospects remained solid. The company was able to count on its strong shareholding—Mme. Dalloz maintained the family’s majority control of the company, while ally Essilor International’s 39 percent in Financière Christian Dalloz, and 10 percent of voting rights, gave the company protection from any threat of a hostile takeover.
Dalloz also sought to shore up its slipping sales in its now crucial U.S. market by rolling out new products, particularly by broadening its product line. Where WGM Safety had long held the leading position in the U.S. market for high-end protective gear, the company now began to introduce products to give it a rising share of the larger market for mid-range equipment.
Dalloz also was helped by a growing trend toward tighter legislation governing safety in the workplace in the United States, a trend that was shortly to spread overseas with the European Community preparing for the coming economic union. As the U.S. economy returned to the growth track, by 1994, Dalloz saw its revenues on the rise again. Toward the end of 1994, however, Christian Dalloz looked to a new acquisition to boost its scale.
The company’s vulnerability to cycles in the U.S. economy—where it continued to register more than 80 percent of its profits—encouraged it to seek greater geographical balance. In October 1994, the company found a promising counterweight to its North American operations when it reached an agreement to acquire hearing protection specialist Bilsom, based in Sweden and held through a subsidiary of the Wallenberg group, for FFr 107 million. The purchase more than doubled Christian Dalloz’s revenues—nearly FFr 800 million in the first full year after Bilsom’s consolidation—and raised its European operations to nearly 30 percent of its total sales. Bilsom also helped balance Dalloz’s product line, giving it a fourth major category of protective equipment operations.
The company benefited from new legislation passed in the United States controlling fall protection standards in the workplace, which saw Dalloz’s fall protection sales jump in 1995. The company also saw new growth in its sunglass lens division, after it acquired a small Italian company specializing in lenses for the mid- and high-end sunglasses market. The acquisition helped Dalloz reorient its sunglass lenses sales and attract new interest among the world’s major sunglasses manufacturers. By 1995, the company’s lenses sales had expanded by more than 50 percent.
Christian Dalloz is a serious business partner in a serious business: protecting the quality of life. Personal safety is a global issue and it calls for a company with a global perspective and a large pool of resources to meet all the challenges.
In 1996, the company restructured its operations around its three principal activities: head protection, fall protection, and lenses for sunglasses. These were placed under the new divisions Dalloz Safety, Dalloz Fall Protection, and Dalloz Sunoptics, respectively. The company then returned to the acquisition table, buying up two British companies, Pulsafe Safety Products and Troll. Although these acquisitions were less spectacular than the WGM and Bilsom acquisitions, they nevertheless boosted the company’s product range for eye protection and extended into safety rescue and sports equipment.
Christian Dalloz continued to add new acquisitions to its portfolio. In 1997, the company paid £2.4 million to U.K.-based Blagden Industries for its French operations, Komet. The move enabled Blagden to concentrate on and expand its core chemicals operations, while transferring the Komet protective equipment operations and brand to Dalloz. In that year, Essilor increased its holding in the company beyond the 33 percent mark, which normally was required by French law to trigger a full-scale takeover offer. Essilor and Ginette Dalloz reached a shareholder’s agreement, however, in which each was given the right to acquire any of Dalloz’s shares the other might put up for sale, allowing Dalloz to remain independent.
Dalloz then continued its expansion, buying up Australia’s Moxham in 1998, boosting the company’s fall protection assets and giving it new access to the Australian and New Zealand markets. In that year, also, the company prepared to resolve lawsuits brought against its subsidiaries in Texas, which threatened to approach FFr 40 million in settlement costs, while depressing Dalloz’s stock price.
As the worldwide market began to move toward consolidation, Dalloz determined to be among the industry’s major players. Increasing its European position, the company acquired Germany’s Söll, the leading manufacturer of high-access safety equipment. That acquisition strengthened the share of European sales, adding nearly FFr 200 million. The following year, Dalloz returned to the buying trail, when it purchased Fendall Company, based in Illinois, one of the industry leaders in the manufacture of portable emergency eyewash equipment. The Fendall acquion, which cost the company $17 million, fitted neatly into Dalloz’s extensive range of protective eye equipment.
Entering 2001, Dalloz engaged on a restructuring of its industrial base, a process begun in 1998, which included the shutting of several facilities to concentrate its production and the installation of a computerized system across its worldwide activities—the company’s products were now present in more than 75 countries. While continuing to seek new acquisitions, Dalloz also started the new century focused on three main priorities, continued restructuring of its production facilities; launch of new product innovations; growing dominance in the consolidating protective equipment industry.
WGM Safety Corp.; Willson Fall; Christian Dalloz Sunoptics; Financière Dalloz Christian; Miller-Dalloz Fall Protection.
Abatix Corp.; Bacou USA, Inc.; Lakeland Industries, Inc.; Mine Safety Appliances Company; Vallen Corporation; Worksafe Industries Inc.
- Christian Dalloz founds plastics company.
- Company begins production of lenses for sunglasses.
- Company switches lenses production to polycarbonates.
- Company launches scratch-resistant protective coating.
- Company develops expansion strategy; creates Société Tunisienne de Lunetterie.
- Company is listed on Lyons Bourse secondary market; shareholder agreement is made with Essilor International.
- WGM Safety Corp. (U.S.A.) is acquired.
- Company enters market for intra-ocular implants; Christian Dalloz dies in automobile accident.
- Bilsom (Sweden) is acquired.
- Core businesses undergo reorganization; Pulsafe Safety Products and Troll (U.K.) are acquired.
- Komet (France) is acquired.
- Moxham (Australia) is acquired; restructuring of industrial park begins.
- Söll (Germany) is acquired.
- Fenadll Company (U.S.A.) is acquired.
“Blagden to Expand with Komet Cash,” Independent, May 2, 1997, p. 26.
“Christian Dalloz change de dimension,” Les Echos, August 3, 1994 p. 6.
“Christian Dalloz joue la carte de la croissance externe,” Les Echos, June 26, 1995 p. 15.
Le Masson, Thomas, “Christian Dalloz optimiste pour I’exercice 2000,” Les Echos, June 9, 2000 p. 18.
——, “Christian Dalloz souffre d’un manque de visibilité,” Les Echos, June 25, 1999 p. 12.
Texier, Michel, “Des perspectives positives pour Christian Dalloz,” La Tribune, May 2, 1995.
—M. L. Cohen