preview

Monmouth, Inc

Better Essays

For the exclusive use of P. ISLAS GARCIA 4226 JULY 31, 2010 THOMAS R. PIPER HEIDE ABELLI Monmouth, Inc. Harry Vincent, executive vice president of Monmouth, Inc., was reviewing acquisition candidates for his company’s diversification program. One of the companies, Robertson Tool Company, had been approached by Monmouth three years earlier but had rejected all overtures. Now, however, Robertson was in the middle of a takeover fight that might provide Monmouth with a chance to gain control. Monmouth, Inc. Monmouth was a leading producer of engines and massive compressors used to force natural gas through pipelines and oil out of wells. Management was concerned, however, over its heavy dependence on sales to the oil and …show more content…

Their goal was to build, through acquisition, a hand tool company with a full product line that would use a common sales and distribution system and joint advertising. To do this they needed Monmouth’s financial strength. Dessex provided a solid base to which two other companies were added. In 2000 the Keane Corporation was acquired. The company had been highly profitable but suffered in recent years under the mismanagement of some investor-entrepreneurs. A series of acquisitions of weak companies with poor product lines eroded Keane’s overall profitability. Discouraged, the investors wanted to exit their ownership position, and Monmouth—eager to add Keane’s well-known and high-quality measuring and fastening tools to its line—was interested in the opportunity. It was clear that some of Keane’s lines would have to be dropped and inefficient plants would have to be closed, but the rules, ratchets, and wrenches would play an important part in Monmouth’s product strategy. Monmouth further expanded into hand tools with the acquisition of the Kroll Electric Corporation. Kroll was the world’s leading supplier of soldering tools to the industrial, electronic, and consumer markets. It provided Monmouth with a new, high-quality product line and production capacity in England, Germany, and Mexico. Monmouth was less successful in its approach to a fourth company in the hand tool business—the Robertson Tool

Get Access