Techtronic Industries Co., maker of Hoover vacuum cleaners, said it has completed its acquisition of bankrupt rival Oreck Corp. and expects the Nashville, Tennessee-based company to make money next year.
Hong Kong-based Techtronic is hoping to turn the company around by reducing expenses, Chief Executive Officer Joseph Galli Jr. said in an interview in the former British colony today.
Galli’s company bought Oreck through an auction after the U.S. vacuum cleaner maker had filed for Chapter 11 bankruptcy. Techtronic got about 73 percent of its sales last year from North America, where it sells brands from Hoover to Dirt Devil.
“We feel we bought it under very favourable conditions and it will be highly accretive,” said Galli of the Oreck acquisition. “It will make money in 2014.” He didn’t disclose the price of the acquisition.
The company is keeping Oreck’s manufacturing in the U.S., said David Butts, executive vice president.
Techtronic yesterday reported a 23 percent gain in net income to $118 million for the six months ended June, lagging the $127.7 million average estimate of three analysts surveyed by Bloomberg. Sales jumped 10 percent to $2 billion.
“There were some unneccessary expenses that we’ll be able to eliminate,” Galli said without elaborating.
The company, whose competitors include Stanley Black & Decker Inc. and Japan’s Makita Corp., expects sales to grow at a “strong single-digit” pace this year amid the economic recovery in the U.S., Galli said. Techtronic plans to roll out 400 new products globally next year, he said.
Techtronic dropped 1.7 percent to HK$17.90 at the midday break in Hong Kong trading, while the benchmark Hang Seng Index lost 0.7 percent.