If you can't beat 'em, join 'em. Or even better, acquire 'em.
United Industries, the second largest insect-repellent manufacturer, announced Dec. 6 that it acquired WPC Brands, which owns Repel Insect Repellents, Atwater Carey First Aid Kits, Reflect Sun Care Products and Potable Aqua Water Purification Tablets.
United Industries -- a St. Louis company whose market name is Spectrum Brands -- manufactures the Cutter brand of repellents. Cutter and Repel have competed in mass market stores such as Wal-Mart. SNEWS reported in November the rumblings that United might buy WPC to either own or eliminate Cutter's competition.
Bob Caulk, United's chairman and CEO, said he intends to preserve the Repel brand. "We think it has a following among outdoor enthusiasts, and our product (Cutter) is more for families and casual users," he said. "The Repel line is for more serious enthusiasts, and that's a position we intend to keep, at least for the foreseeable future."
However, Caulk said he has not determined the fate of WPC's other brands. "We have not yet articulated what our growth strategy will be for Atwater Carey, Potable Aqua or Sting Eze," Caulk said. "Because we have not been sporting goods oriented, we are sort of reliant on the Repel management who is staying with the business to help lead us in that direction. It's business as usual for those brands."
When asked whether brands such as Atwater Carey might be brought into United's broader distribution, Caulk said he was unsure. "We need to evaluate their current distribution and see what the impact would be. The last thing I want to do is offend the current distribution by making a weak attempt at broadening it," he said.
Caulk added that all of the WPC products will be produced in the current WPC facility at least through the 2003 season. "We have also committed to telling employees exactly what the long-term direction is no later than February of 2003," Caulk said.
While most of the WPC management will remain in place, WPC President Jim Burt will remain as a consultant for six months then leave the company.
Afterward, Jim Scheetz, a manager for United Industries, will serve as general manager for WPC Brands.
The acquisition of WPC is the latest in a series of moves made in the last 18 months to expand United Industries. "We have doubled our business over the last year from $300 million to $600 million," said Caulk.
SNEWS View: We're still wondering whether some of the WPC products will survive or get stung in this deal. The formulations for Cutter products and Repel products are very similar, so it's really a matter of whether United sees value in maintaining separate brands for separate and different consumers -- Cutter for casual users, and Repel for enthusiasts. Caulk said that United is suited toward operating multiple brands in markets, so Repel very well could stay on the shelves of Wal-Mart. What's less clear is whether United wants to deal with distribution into small outdoor specialty stores, because its other products are tailored for the mass market. The future is even cloudier for WPC Brands' more niche products. Caulk recognizes that WPC holds unique products such as Potable Aqua, but do small money-makers in niche markets fit the scheme of a $600 million company? Keep your ears open. We wouldn't be surprised if potential buyers come buzzing around some of WPC's brands.