Corporations: Putting Facts Together

To stock analysts, economists and businessmen, Standard & Poor’s yellow financial reports on 1,800 U.S. corporations are as familiar as the daily news papers. S. & P. is so thorough that it even turns out a report on S. & P., modestly describing itself as “one of the leading organizations in the U.S. publishing financial information and advice and providing investment counseling services.” Last week S. & P. President Fred erick A. Stahl announced that his company will merge with McGraw-Hill, the largest U.S. publisher of trade journals and technical books, in a combine that will greatly expand McGraw-Hill’s position in the mushrooming technical information market. Said Stahl: “We both provide services, we in the financial field, they in the industrial field. As such, we can each gain from the other.”

Some 49 trade journals, from Business Week and Product Engineering to Today’s Secretary and Nursing Home Administrator, still provide nearly half of McGraw-Hill’s revenues ($193 mil lion last year). But its information services and book-publishing divisions have been growing much faster than the magazines. The company’s sales of information—consisting chiefly of news and marketing reports for the construction, oil, and nuclear industries—are almost ten times what they were in 1955. With the acquisition of S. & P., McGraw-Hill’s information sales will rise another 70%.

Besides its yellow reports, S. & P. publishes 25 other advisory and factual publications for brokers and investors, maintains investment counseling offices in five major cities, lists a daily average of 500 stock prices. Its sales in fiscal 1965 were $22 million. Under the merger agreement, which must be ratified by the boards and stockholders of both companies, S. & P.’s shareholders will be paid upwards of $50 million in McGraw-Hill stock, which sold last week at 49½ a share. McGraw-Hill plans no major changes in S. & P.’s operations. “You don’t take a sound, successful business like Standard & Poor’s and tamper with it,” says Executive Vice President Robert Slaughter. As an institution in the financial world, S. & P. will retain its own offices in Wall Street, continue to issue its financial reports under its own name.