Industry: Consumer Product
Energizer Holdings Inc.
The Energizer Holdings Inc. is a global public corporation operating broadly in the production of household and personal care products. The company specifically offers portable power batteries, lighting, personal grooming, wet shave, feminine care, skin care and infant care products. The company has acquired several companies over the past year with the recent activity that marked the transition of the company to a publicly traded company being the separation from the parent company, Edgewell Personal Care. This separated the company’s two products; household products and the personal care products.
In 2003, Energizer acquired Schick-Wilkinson Sword (SWS) from the Pfizer, Inc. The SWS is the second largest manufacturer and supplier of men’s and women’s wet shave products worldwide. In 2008, Energizer acquired all the outstanding stock of Playtex Products, Inc. which is manufacturer and marketer of popular branded products in N.A. In 2009, Energizer acquired Edge and Skintimate shave preparation brands from the S.C Johnson & Sons, Inc. which expanded the company’s market coverage for the wet shave products. In 2010, they acquired American Safety Razor, LLC, whereby they acquired all the assets of the target. The target is the leading global manufacturer of private label or value wet shaving blades and razors. Then in 2013, Energizer Holdings Inc. acquired Stayfree pad, Carefree linear, and o.b tampon feminine hygiene brands based in U.S., Canada and Caribbean from McNeil PPC, Inc., and the Johnson & Johnson, Inc. The acquisition strengthened the company’s feminine care product.
M&A Advisor Inc., (2013) writes, mergers and acquisitions have become an increasingly prominent in the corporate growth but nonetheless, the success of an effective M&A strategy depends with a number of factors such as proper diligence, post-merger integration process, and external factors. According to the Energizer Holdings Inc. management, (2014) strategy has always been the key to the success of the M&A. One of the strategies, which are very essential, is the evaluation of the executive team. The company believes that the risk of having the executive team involved in the process can result in very great losses. The company therefore depends so much on the historical data and examines the market and industrial position of the target corporation. They also focus so much on the post-merger integration process.
As Patrick A. Gaughan, (2005, p. 4) argues, M&A have become an increasingly popular strategy for achieving corporate growth and diversification. Energizer’s strategies in the acquisitions they have established have majorly been diversification or product differentiation, technological advancement through research and development, globalization, price controls, brand perception, customer service, and performance. The firm has also managed to maintain their initial workforce. This has been one of the greatest challenges of the mergers and acquisitions but as for the Energizer Holdings Inc., the company believes that their original workforce is always efficient and productive if they are well trained when there are organizational changes. This is under effective human resource focus as Eunjung and Park, (2003) argued that it’s very essential for an organization to know how to retain and develop their human resource.
One can generally conclude that the company’s greatest M&A success always has been the acquisition of firms that have high performance. In the information provided by the company in its Form 10-K, (2014), another important strategy that minimizes risks has always been the licensing or ownership or confidential patents, trademarks and technology of their acquisitions and subsidiaries. The only strategy that should be possibly evaluated is the formation of an acquisition that facilitates the gain of technological advancement at a relatively low cost. Outsourcing is a very common practice in the current times but the Energizer group seems to prefer things doing in-house. In such a competitive market as the one that the company operates in, forming collaborations with the other firms through joint ventures, outsourcing agreements, etc can be increasingly more effective.
The acquisitions as the company reported had resulted into an increase in the sales revenue and increased global market. However, despite the fact that the Energizer Holdings gets good cash flow from its operating activities, the company’s overall expenditure in this investment activities had increased