Cooper Industries Case

Topics: Mergers and acquisitions, Gas compressor, Manufacturing Pages: 5 (1567 words) Published: April 21, 2013
Managerial Policy|
Cooper Industries Case
By: Aena Rizvi, Anum Rinch & Rafia Farooqui|


In 1833, an iron foundry was founded by Charles and Elias Cooper in Mount Vernon, Ohio. Overtime, Cooper became the market leader in pipeline compression equipment. Cooper Industries was around 150 years old and was mostly involved in the manufacturing of engines and compressors to facilitate the flow of natural gas through pipelines. They began expanding it around 1960s and for that, more than 60 manufacturing companies were acquired in the following 30 years. This came to be known as the process of Cooperization and some re-known companies became a part of the Cooper banner to form a highly successful and profitable business. Timeline of Important events for Cooper:

Year| Event|
1833| Charles and Elias Cooper founded an iron foundry in Mount Vernon, Ohio| 1900| Switching to the production of natural gas compressors| 1920| Cooper became the leader in pipeline compression equipment| 1957| Gene Miller was elected as the president|

1958| Cooper suffered a cyclical downturn and a corporate raider acquired enough shares to elect two board members| 1961| Miller recruited Robert Cizik as chief assistant for corporate development from Standard Oil| 1965| The company formally adopted the name ‘Cooper Industries’| 1967| Headquarters were moved to Houston|

| Diversification began and Cooper acquired Lufkin Rule Company| | Bill Rector was appointed as Corporate Vice President and given capital to develop the Tool Group| 1968| Cooper acquired Crescent Niagara|

1969| Cizik became Chief Operating Officer|
1970| Cooper acquired Weller Manufacturing Corporation|
| Tool Group set up its headquarters in Apex, North Carolina| | C. Baker Cunningham joined the corporate planning department at Cooper| | Cooper purchased Dallas Air Motive|
1970-1988| Cooper Divested 33 businesses|
1971| Cunningham joined the Tool Group as director finance and introduced a new computer system to manage inventories, sales, shipping and billing for all tool products | 1972| Cooper acquired Nicholson Company|

1974| Cooper’s acquisitions had relocated their manufacturing operations to new plants mostly in the South | 1975| Robert Cizik became CEO and formed Corporate Level Manufacturing Services Group| 1976| Cooper purchased Superior, maker of engines and natural gas compressors| 1979| Cooper purchased Gardner-Denver|

1981| Crouse-Hinds was acquired|
| Cooper acquired Kirsch|
| Cooper sold off its Airmotive Division|
| Compression, Drilling and Energy Equipment generated 50% revenues and 60% operating profits| 1984| Purchasing council was established|
1985| Cooper acquired McGraw Edison |
1987| Cooper expanded its industrial compressor business by purchasing Joy’s air and turbo compressor business for $140 million| 1988| Cooper was a broadly diversified manufacturer of electrical and general industrial products, and energy-related machinery and equipment| | Electrical and Electronic (E&E) became Cooper’s largest segment, generated 50% corporate sales and 57% operating profits | | Acquisitions in the Tool Group were consolidated and new manufacturing facilities were constructed| | Compression Drilling and Energy Equipment accounted for 21% sales and less than 10% of operating profit|

Vision, Mission and Corporate Strategy:
Cooper’s success lied in making high quality products that become important input for other products such as turbine compressors. They wanted to be a company with a steady stream of income which is why they always went after ventures that were profitable. They made sure they had no cash flow of liquidity issues just to ensure this. Moreover, they were more interested in being an owning company rather than just a holding company. To make sure of this they made their acquired companies...
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