In a $1.6 billion deal, Johnson Wax Professional (JWP) announced in November that it would acquire DiverseyLever, the Unilever Co.’s institutional and industrial (I&I) cleaning business. The consolidation of the two businesses is the largest ever in the I&I market. With a combined 17 percent of the $15 billion market sector, Ecolab will remain the market leader with 20 percent, according to Greg Lawton, JWP’s president and CEO.

Set for completion at the end of the first quarter of 2002, the acquisition will be funded by bank debt and public bonds, says S. Curtis Johnson, chairman of JWP. Unilever will also hold one-third interest in the company for five years, after which it will exit fully.

“We are extremely excited about the long-term strategic benefits from this transaction,” Lawton says. “Combining our strengths with those of DiverseyLever will result in a company that has the size, strength and geographic reach to compete anywhere in the world with anyone in the industry. Our complementary product platforms — JWP’s expertise in housekeeping and floor care, and DiverseyLever’s strengths in warewashing, laundry and food processing and sanitation — will significantly enhance our offering.”

The scope of plant consolidation and job cuts cannot be predicted at this time, as the strategic plan for integration is still being devised. However, any acquisition of this size will result in job losses, Johnson explains.

The company also plans to adopt a new name, which will be chosen during the integration process.

Unilever’s continued stake with the business made the deal more financially attractive, says Lawton, but more importantly, JWP says it values the partnership and looks forward to working with Unilever.

“It really reinforces our ability to leverage both companies,” he says.

The JWP world headquarters will remain in Racine, Wis., and the management team will be led by Johnson and Lawton. Also, JoAnne Brandes is chief administrative officer and general counsel, Michael J. Bailey is chief financial officer and Cetin Yuceulug, DiverseyLever’s current president, will serve as a special adviser during the transition and will retire in July 2002.

DiverseyLever is a worldwide producer of cleaning products, equipment and services for the I&I market, with about 12,000 employees in 60 countries. Its sales for the 12 months prior to June 2001 were $1.5 billion.

JWP has 3,800 employees is also an international player in the I&I marketplace, providing products and services in more than 50 countries.

— Seiche Sanders

Post Attacks: ISSA Attendance Above Nation’s Average

The final numbers are in: 11,674 attendees were registered for this year’s ISSA/Interclean convention in Orlando. That’s 25 percent fewer than initial estimates, but only slightly less than the 12,848 who attended the 2000 show in Atlanta. The numbers are encouraging, however, considering other trade shows since the September 11 attacks were more deeply affected.

“The numbers spoke highly of the industry, considering the average U.S. trade show held between September 11 and October in all industries showed a drop of more than 40 percent from the previous year,” according to ISSA.

For the sake of comparison, it’s also interesting to look at the 1999 Chicago show — the last where end users attended. More than 17,000 attended the popular Chicago venue.

Many distributors and manufacturers went into the show prepared for a low turnout. The sluggish economy had already caused some companies to cut back on spending. Then the terrorist attacks made the outcome of Orlando’s show even more uncertain.
“We had low expectations because of September 11 and we were very surprised about how busy it was,” says Gerry Human, vice president of STEP1, Newbury Park, Calif. “We had planned on there being fewer distributors, so we only brought four staff to run our booth instead of our usual eight. But we had so much traffic that in the end we were understaffed.”

Human says that although there were fewer people at ISSA 2001 than previous years, the decision-makers were present, which generated more business and less talk.

“At a lot of shows you get those people who are just there to look, and they want to talk, but they’re not really interested in doing business,” says Human. “There weren’t too many of those this year at all.”

The ISSA says that 682 exhibitors were represented, 40 more than in Atlanta for the 2000 show. Many manufacturers, like Human, who were concerned about how many distributors were going to attend, found that they had little reason to worry.

“We had a lot of new customers and a very high turnout for our existing customers as well,” says Human. “Traditionally, Orlando is a less attended show than Chicago or Las Vegas, but it seems like there was a lot of new business.”

Distributors who experienced the ISSA show for the first time had a chance to talk with leading business owners in the industry.

“I thought it was terrific,” says Chris Luxton, a distributor, manufacturer and inventor of jan/san supplies from Great Britain. “The show was quite innovative in many respects and impressive in the way it was all laid out and so professionally run.”

Luxton says that he looks forward to bringing his discoveries back to Europe and developing the business partnerships that he was able to form.

“I picked up several different and unique cleaning items and cleaning products that I am going to introduce in the U.K.,” he says.

— Alex Runner

Industry Manufacturer Aids in Post Office Clean-up

With the threat of anthrax contamination causing increased anxiety for U.S. Postal workers, a manufacturer in the jan/san industry is trying to help find solutions for effective removal of hazardous materials.

Minuteman International, Addison, Ill., was recently asked by the U.S. Postal Service to help develop an industrial strength vacuum cleaner able to pick up hazardous or potentially hazardous materials without exposing the operator to contaminants.

“We were approached by the Post Master General, and there have been several meetings since that time,” says Greg Rau, president and CEO of Minuteman. “We’re working with the U.S. Postal Service to develop a cleaning system that can be used for regular day-to-day cleaning as well as helping them deal with foreign substances.”

The Minuteman Bio-Haz Vac contains a specialized filter that is able to remove 99.99 percent of floor debris. The debris is then stored in a compartment that the operator does not need to touch until hazardous materials officials come to remove the questionable substance.

“We’re trying to give them peace of mind about their jobs,” says Rau.

SCA Expands Market Stronghold

SCA acquired Encore Paper Co., Inc., of South Glens Falls, N.Y., in November, for $92 million on a debt-free basis. The combined company will account for $850 million in sales annually. Encore will be integrated into SCA Tissue North America LLC, Neenah, Wis.

Encore Paper, incorporated in 1991, was owned by institutional investors, and had been through various owners since the late 1800s. The company produces more than 85,000 tons of paper annually on three paper machines and converts 6 million cases of finished goods per year on 20 converting machines at its New York mill. Its products include roll and folded towels; dinner, luncheon, and dispenser napkins; and bathroom tissue. Encore’s brand names, Encore, Ovation, and Intuition, are marketed primarily to the away-from-home market in the eastern United States. The company employs approximately 350 people.

SCA Tissue North America was formed in March 2001. SCA Tissue and Encore Paper have a combined 2,650 employees in 15 locations in the United States and Canada. The combined companies have 445,000 tons of paper production capacity and 580,000 tons of converting capacity.

SCA Tissue North America’s brands include Park Avenue Ultra, Coronet, Main Street, Second Nature and Tork. SCA North America employs some 5,400 people in over 50 locations.

News Makers

Proctor & Gamble, Cincinnati, has announced that it intends to sell the retail Comet business to Prestige Brands International Inc. However, the company has specifically retained the commercial market rights to the Professional Line Comet products, as it did with the earlier sale of Spic and Span.

Advantage Marketing Associates (AMA), Chicago, an international alliance of wholesalers providing a wide range of janitorial, food service, safety and industrial maintenance products to distributors, recently released its 2002 Buyer’s Guide.

SpillTech Environmental Corp., Alpharetta, Ga., has announced the appointment of Complete Environmental Products as a master distributor of SpillTech brand sorbents in the U.S. Gulf Coast states.

Impact Products, LLC, Toledo, Ohio, recently announced that it has been purchased by an investor group comprised of the company’s senior management.

Distributor Partners of America (DPA), a member-owned marketing organization, has formed the “Round Table,” an alliance of member-owned and member-driven buying/marketing organizations within the same and/or crossover industries. The Round Table is headquartered in Naples, Fla.

Mergers & Acquisitions

HP Products Corp., Indianapolis, a leading independent distributor of jan/san supplies and paper products, has announced the acquisition of Continental Paper and Supply Co., Detroit. Continental is a large regional distributor of paper, packaging and sanitary maintenance supplies that has served the greater Detroit market since 1976.

Bunzl Distribution Inc., St. Louis, announced that it has further expanded its North American outsourcing services division with the acquisitions of the Eastern Paper division of EPC Industries in Canada and Packers Engineering & Equipment in Omaha, Neb.




POSTED ON: 12/1/2001