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issue: December 2006 APPLIANCE Magazine

Executive Corner
Hoover Acquired: A New Home for an Iconic Brand


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by Tim Somheil, Editor, APPLIANCE magazine

Just hours after it was announced that Whirlpool was selling the Hoover floor care business to Techtronic Industries, APPLIANCE magazine spoke to Joseph Galli, CEO of Techtronic's floor care business. 

Industry watchers were well aware of Whirlpool's intention to divest the Hoover floor care business that had come to it with the acquisition of Maytag last March. Still, it was somewhat of a surprise when the announcement came yesterday (Dec. 7, 2006) that an agreement had been signed: Whirlpool will sell Hoover to Hong Kong-based Techtronic Industries Co. Ltd. (TTI). Hoover will become part of Techtronic Appliances Holdings Company Limited (TTA), the appliance and floor care business of TTI.

Joseph Galli is CEO of TTA – a position he's held only since Nov. 1, 2006. He already has responsibility for one of the top global floor care appliance companies. It includes the Dirt Devil/Royal brands, with major shares of the U.S. floor care markets, and Dirt Devil is a top brand in much of Europe. In floor care, TTA also owns the Vax brand, strong in Europe, and the Regina brand.

Now, Hoover enters the picture.

"We have viewed Hoover as a tremendous brand and a high-potential business, and we're excited about making this acquisition," Galli told APPLIANCE magazine in a phone interview just hours after news of the acquisition agreement broke. "We're a very strong global floor care company and yet, in the U.S., Hoover is the leader and is an iconic brand. This gives us a chance to build a real leadership business in floor care."

Discussing TTA's specific brand strategy for Hoover is premature at this stage, with the ink still drying on the agreement with Whirlpool and months to go before the acquisition deal can be closed. Still, Galli said, "I can tell you this: Hoover is a premium brand with great potential and it will be featured prominently in our product line alongside Dirt Devil."

TTA sees Hoover as more than a name, however. "Hoover has a rich tradition of innovative new products—the Hoover Floor Mate is an incredible product," Galli said, referring to the multifunction upright appliance that vacuums, washes and dries. "We're very excited about merging that Hoover capability with the capability we have inside of TTI. Techtronic is a very innovative company with high-speed new product development capabilities, and I think the addition of Hoover will only make us better."

In fact, TTI has three existing product development centers and more than 500 engineers and designers on-staff – an infrastructure that serves TTI's existing floor care appliance business as well as power tools, sold under the Milwaukee®, AEG® and Ryobi® brand names; and outdoor power equipment, sold under Ryobi® and Homelite® brands. The company has several global offices, extensive manufacturing operations in China, and operates the OWT Industries, Inc. assembly, service, research, and design center in South Carolina, U.S.

Galli himself is, out of necessity, a globetrotter. He maintains offices in Hong Kong and Baltimore, Maryland, U.S., and he emphasizes the need to be on-hand in the markets his products go into.

Which brings up the question of Hoover's international presence. Geographically, what markets are included in the acquisition of the Hoover business? Certainly not Europe, where Hoover is a full-line appliance brand under the control of Italian OEM Candy.

"For the most part, beyond Europe we will own the Hoover brand," Galli told APPLIANCE. While he wouldn't get into the specific geographic breakdown, he emphasized that, "Europe is the one market that we won't have with Hoover." He noted, however, that TTA already has a substantial presence in the European floor care business through Dirt Devil and Vax.
 

The Acquisition Process Begins

Techtronic Appliances Holdings has begun the steps to obtain the needed approvals from regulatory agencies for the acquisition – a notoriously unpredictable process.

"That process can take as little as a couple months or it can take 6 months or longer," Galli said. "We're optimistic that everything will go just fine; this is an appropriate merger. We want to get that process done, and then we'll move on to building the strategic plan for Hoover."  TTI estimates the deal could close as early as the first quarter of 2007, or as late as the third quarter.

Galli noted that there is strong experience within the corporate structure of TTI to facilitate a successful acquisition. "Horst Pudwill, who is chairman and CEO of the overall corporation, has masterfully integrated one acquisition after another."

Galli told APPLIANCE he certainly has many ideas about the direction to take the global floor care business when Hoover comes aboard, but, naturally, he's disinclined to make them public at this very early stage. "What you should know is that this is a fabulous opportunity for us to take an iconic brand, Hoover, and revitalize it, invest in it, and make it even better. And that's exactly what we're going to do."
 

 

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