Sunday, May 25, 2008

Parker Hannifin - A Century of Mergers

I came to know from a Wall Street Journal article republished in Mint that Parker Hannifin made more than 100 acquisitions. It will be interesting to study this company acquisition process to understand the practices that make a merger a success.

A brief about Parker Hannifin

Arthur L. “Art” Parker founded Parker Appliance Co. in 1918. It had to be closed and Parker went back to job. He restarted the company offering tube fitting components, attracting both automotive and industrial customers. One of his first customers was a rather famous one: Charles Lindbergh who used the components for his aeroplane.

In the mid 1930s, Art Parker took a major step forward by purchasing from the bankrupt Hupp Motor Co. an enormous, 500,000-square-foot manufacturing facility in Cleveland. Years later, the entire facility was fully utilized by Parker operations. By the end of the decade, Parker Appliance reached $3 million in sales.

Art Parker died in 1945 and his wife Helen (Fitzgerald) Parker invested his $1 million life insurance policy back into Parker company. She acquired Berea Rubber Company.

Another family member, Patrick S. (Pat) Parker was named president in 1968 and at that time annual sales revenue was $197 million. He retired from the position of chairman in 1999 and, by the time of his death in 2005, the company had become an $8 billion global giant of pneumatic, hydraulic, and electromechanical products.

Parker acquired 42 businesses in the 1994-2000 period.

Present chairman and CEO, Donald E. Washkewicz started with Parker in 1972 as an engineer in the Hose Products division. He carries on the Parker tradition of acquisitions, while also building brands and globalizing.

The result is stunning growth and nearly $11 billion in annual sales in fiscal 2007.

http://www.ien.com/article/ien-75th-anniversary/114645




Parker Hannifin, the Cleveland-based industrial products manufacturer, has made around 100 acquisitions in the past 10 years. According to CEO, Donald Washkewicz every acquisition fits their core business and is something they know well.

The company strives to keep talent at acquired companies by communicating frequently with employees and sticking to an orderly integration process. An “integration manager” is deputed to each acquired company to get to know its managers and rank-and-file employees and to help them understand Parker Hannifin’s goals. The company then sends teams of supply chain and sales managers, who share how they get the best prices for both supplies they use in manufacturing and for their own products. Finally, an innovation team urges acquired companies to launch new products to expand their units.

“We don’t try to ram our ways down everyone’s throat because that won’t fly, but instead try to get employees’ approval by showing how they can be even more successful (with us) than before they were acquired,” says Washkewicz. Do they remove people from acquired companies? The answer is yes, managers who don’t get results are removed.

http://www.livemint.com/2008/05/23235306/In-dealmaking-keep-people-in.html

Thursday, May 22, 2008

Branding and Mergers & Acquisitions

Not much is precisely known about the effects of M&A on brands, brand management and brand equity.

What are the critical questions to be asked by companies before an M&A?
What happens when two big brands come together either through a merger or through an acquisition?
How should the brand strategy of the resulting entity be designed?


Some of the critical questions are examined by Martin Roll, an expert on branding in an articel that you can access from the website of venturerepublic.

http://www.venturerepublic.com/resources/Branding_and_M_A_marketing_strategy_brand_leadership.asp

Tuesday, May 13, 2008

Integration - Google Books

Done Deal: Your Guide to Merger and Acquisition Integration By M Beth Page, Withers, Pam, Kennelly, Phyllis

http://www.google.co.in/books?id=7qEwQyMZeA8C&printsec=frontcover&dq=integration+merger&lr=&ei=g3spSL7FGpXgtAPBu7y4DQ&sig=79oXhCpS9qq7cOVTgCnpjUncO0A#PPP11,M1

Mergers and Acquisitions: Managing Culture and Human Resources By G√ľnter K. Stahl, Mark E. Mendenhall

http://www.google.co.in/books?id=juH17s4HF5AC&printsec=frontcover&dq=mergers+and+acquisitions&lr=&ei=V30pSIrzHI3ssQOImt27DQ&sig=J0nYLK94oKiHbiRiRvfajS3FMT0

Due Diligence Google Books

Due Diligence for Global Deal Making: The Definitive Guide to Cross-border Mergers

http://www.google.co.in/books?id=DkkVXp-fkmUC&printsec=frontcover&dq=due+diligence&ei=wXUpSPfhE4XusQPM5c22DQ&sig=eWHLNZ1Etl4IjA00Rm11ufWXqmE

Due Diligence: The Critical Stage in Mergers and Acquisitions By Peter Howson

http://www.google.co.in/books?id=qBbWiLNDsVkC&printsec=frontcover&dq=due+diligence&ei=wXUpSPfhE4XusQPM5c22DQ&sig=iW8EZG5e75-RAUxrmdHzswXJyg4

The art of M&A due diligence: navigating critical steps & uncovering crucial ... By Alexandra Reed Lajoux, Charles M
http://www.google.co.in/books?id=l9UXkqvkPBYC&printsec=frontcover&dq=due+diligence&ei=wXUpSPfhE4XusQPM5c22DQ&sig=BW3Weja-wTowRRnSUY6v9azzv4c