The size of the biggest family fortune made in the get-rich-quick U.S. electronics industry was fixed last week. Only 30 minutes after being placed on the market, the first public offering of 1,000,000 shares of Transitrun Electronic Corp. at $36 each was snapped up by investors. Not since the first public sale of 10.2 million Ford Motor Co. shares in 1956 has a stock issue attracted such broad public demand. Transitron quickly jumped to $49 per share in over-the-counter trading, closed the week at $43 per share. To Transitron's owners, David and Leo Bakalar. went $34.4 million for part of their interest in the third largest U.S. semiconductor producer (first: Texas Instruments Inc.; second: General Electric Co.). The Bakalar brothers still personally hold 6.4 million shares, almost evenly distributed between them. Their total worth, based on last week's market price: $311 million.
First With the Best. The Bakalars have built their electronics fortunes in only seven years. In 1952, Leo had a highly successful plastics business and good bank credit. David had a Massachusetts Institute of Technology Ph.D. in physical metallurgy and some practical semiconductor experience from a job at Bell
Laboratories. In a corner of Leo's plastics factory in Boston, Mass., David developed a commercially produceable gold-bonded diode can electronic switching device for converting alternating current into direct current) that was better than anything on the market. But even after it had a product, Transitron had to wait a year before it could sell any. During that year, Leo poured nearly $400,000 into the new firm, which lost $20,000.
In August 1953, Transitron got its first big order: $40,000 worth of diodes from Remington Rand's Univac division. Sales and profits have soared steadily ever since. Last year Transitron had sales of $30,913,376 and earnings of $6,456,138 after taxes, a 21% return on sales and the highest among leaders in the industry.
Transitron has pioneered in the development of low-noise transistors for use in computers and for military applications. It was the first company to manufacture silicon rectifiers commercially, is now one of the biggest producers of devices used to deliver large amounts of direct current in most electronic circuits. Currently, Transitron is pioneering in the development of thermoelectric materials, which can produce electricity when heated.
The Goal: More Growth. The Bakalar brothers run their three plants, which employ 4,300 workers, with an informal touch. In their rambling Wakefield, Mass, headquarters, which was once an underwear mill, the Bakalars share a secretary, avoid written memos, and do most of their business in corridor conferences with staff members. Decisions by Leo, 46, who serves as treasurer and chairman, and David, 34, who is president, have equal power. To justify the price of Transitron's stock (now selling at a steep 45 times projected 1960 earnings) the company is expected to diversify, use the 2.1 million shares of Transitron's authorized but unissued stock to buy other companies.