Hansson Case Study

The Company - Hansson Private Label (HPL)

HPL was founded in 1992 when Hansson purchased the manufacturing assets of Simon Health and Beauty Products. The company has experienced steady growth manufacturing personal care products (soap, shampoo, mouthwash, shaving cream, sun screen and others) sold under the brand label of HPL’s retail partner including supermarkets and drug stores, reaching $681 M in US sales by 2007.

HPL was purchased by Hansson for $42 million through a 60-40 equity/debt finance mix ($25 million equity and $17 million debt). The debt financing represents Hansson’s largest single investment to date, as Hansson believed he was paying significantly less than replacement costs for the assets. HPL operates on a conservative fiscal approach.

Hansson was confident private-label growth would continue and HPL would become a main player in the industry by focusing on manufacturing efficiencies, expense management, and customer service. For the past 19 years, HPL mission has remained unchanged: to be a leading provider of high quality private label personal care products to America’s leading retailers.

Market & Industry

HPL is considered a private label brand that manufactures personal care products. Private label brands enable retailers rather than manufacturers to control production and packaging of goods. Retailers carry private label goods to provide consumers with lower-priced alternatives to household national brands.

As of 2007, according to AC Nielsen, the quality and packaging of private label goods had improved so drastically that 99.9% of US consumers had purchase at least 1 private label product that year. In fact, private label sales across all categories exceeded $70 billion in 2007, including $21.6 billion specifically within the personal care industry.

HPL is positioned as an industry leader with $4 billion of retail sales, which translates to 19% market shares. Among the different personal care products that it offers, HPL’s...