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Hoover Acquired: A New Home for an Iconic Brand Dec 26, 2006 |
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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."