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An announcement made in the end of January 2005 confirmed that the Houston-based Jim Coleman Company (JCC) had purchased the assets of Portland, OR’s Hanna Car Wash Systems in a move that surprised, and would forever change, the carwash community.
Randy Coleman, vice president of JCC told Professional Carwashing & Detailing magazine that the company’s acquisition of Hanna had been in the works since November 1, 2004.
Coleman stated that the idea had been tossed around within the company for years, but JCC only started calling to inquire about the possible acquisition in April 2004.The details
“Hanna had decided that they were interested in selling and were (considering) a management buyout,” Coleman said.
But, at that same time, Hanna received an offer from JCC and decided to allow JCC to purchase the company’s assets in lieu of this management sale.
“We’re purchasing all of the assets of the company,” Coleman said, “We’re not assuming the liabilities.”
There is a notable exception to the above statement: Coleman made sure to point out that JCC is taking on all equipment liabilities and warranties.
The company will be working with existing Hanna distributors and any company that owns Hanna equipment.
Though JCC has announced that the company plans to keep the Hanna brand name, the manufacturing of all Hanna equipment will be moved to the Jim Coleman manufacturing plant in Houston.
“The move from Portland to Houston is [to allow the combination of] our manufacturing plant with parts of their manufacturing so that we don’t have duplications,” Coleman said.
According to John Antonis, executive vice president for Hanna, the company will keep its offices in Portland and expects that Hanna brand will continue to stand on its own.
“In terms of product development, sales, marketing and branding, our offices will continue their work for Hanna,” Antonis said that the company had previously outsourced its manufacturing.
So this move to Houston might ease the process.Unnecessary duplications and employees
Hanna Car Wash Systems employed approximately 45 individuals in its Portland office, Coleman said, and Jim Coleman had around 275 employees on staff in Houston before this acquisition.
According to Coleman, only about 20 to 25 of those Hanna employees will be making the trek from Portland to Houston.
This is largely due to employee overlap, Coleman said. JCC is a company that has been around a while and already has staff assuming the role of comptroller, human resources, and the like.
“There would have been a duplication of efforts,” Coleman said of the 20 to 25 employees that are not venturing to Houston.
“We did not have a position for some of those other employees because we already had someone.”Why the acquisition?
JCC has been working on an express line of carwash tunnels that is primarily touch-free, Coleman said. However, JCC noticed the need for the addition of a hybrid to this line in order to suit the growing need for a friction wash in the industry.
“We knew [customers] might require friction as well as touch-free,” Coleman said. “So Hanna was kind of our number one choice [for this acquisition].”
Antonis added that research conducted by MGC Capital Corporation, a company commissioned by the International Carwash Association (ICA) after last year’s ICA expo, determined that Hanna had the highest brand equity in the industry, followed by Jim Coleman.
This was all done prior to the asset acquisition.The future of the industry and consolidation
Mark Thorsby, executive director of the International Carwash Association told Professional Carwashing & Detailing’s Associate Editor Lindsey Blanchfield in this month’s Touch-Up section that the carwash industry can expect to see some big happenings at this year’s Car-Care World Expo by way of consolidation.
After this announcement, the industry may see a wave of consolidation and Thorsby may be right, what better place to start than the biggest meeting of carwash manufacturers in the world?