CASE STUDY
Realization
By 1999, Ermanco, Inc. had established the market position of the sortation and accumulation experts in the material handling industry. Annual sales had grown steadily to more than $31 million when SI Handling Systems, a publicly-held material handling company acquired Ermanco for $23 million, about 6.5 times earnings. While there were strong, positive perceptions of Ermanco in the marketplace, perceptions of SI Handling Systems were mixed, with some strong negative perceptions.
Repositioning
Recognizing that SI Handling Systems’ brand image could negatively affect and potentially erode Ermanco’s strong brand equity by rolling Ermanco into the acquiring company or calling Ermanco “an SI Handling Systems Company,” Proteus Marketing’s strategists recommended the creation of a parent entity under which the two brands—SI Systems and Ermanco—could travel independently. Our strategists developed the identity and positioning of the parent entity, Paragon Technologies, and helped position Ermanco under that umbrella, thereby preserving the integrity and brand equity of the Ermanco brand.
Results
The Ermanco brand was allowed to operate independently, without spillover from the SI Systems brand. Results of operations were also tracked individually for each brand. As a result, the brand equity of Ermanco was preserved so it could be easily spun off in 2005, when SI Systems sold the Ermanco brand to a private, German company for $23 million. Ermanco sales in the year prior to the acquisition were approximately $30 million. Accordingly, the transaction price and the sales volume were essentially the same as in 1999. However, the sales price in 2005 was about 16 times earnings.
B2B Marketing Resources
Privacy Policy
Click on sample to close.
Proteus B2B is a marketing consulting firm specializing in repositioning business-to-business companies and their brands. We help companies identify and migrate to positions of market leadership where their brands have few credible substitutes in the marketplace.