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Hansson Private Label Essay

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Hansson Private Label
Founded 1992

To be a leading provider of high-quality personal care products to America’s leading retailers

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Hansson Private Label (HPL) Privately held personal care products company
◦ Soaps ◦ Shampoo ◦ Mouthwash ◦ Sunscreen

◦ Shaving cream





 

Founded in 1992 - Tucker Hansson acquired assets of Simon Health & Beauty Products Acquired HPL for $42 million ◦ Personal investment = $25 million ◦ Financed = $17 million Revenue FY07 = $681million Operates four plants - currently at 90% capacity
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Personal Care Market - FY07 = $21.6 billion ◦ Hand and body care ◦ Personal hygiene ◦ Oral hygiene ◦ Skin care products Stable market unit volume growing1% per year (last 4 years) Key distribution channels ◦ Mass merchants (e.g., Walmart) ◦ Club stores (e.g., Costco) ◦ Supermarkets (e.g., Krogers) ◦ Drug stores (e.g., CVS) ◦ Dollar stores (e.g., Dollar General)



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HPL Key Competitors
◦ ◦ ◦ ◦

Cathleen Sinclair General Health & Beauty Women’s Care Company Skin Care Enterprises

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Proposal from largest retail customer
◦ ◦ ◦ ◦ ◦ ◦ Strengthen relationship $50M expansion investment 3 year contract, no guarantee after Expansion needed - 90% capacity Provide more for other/new customers Doubling debt

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Assumptions
◦ ◦ ◦ ◦



Assumption Pitfalls

Selling Price per Unit increases at 2% per year Capacity utilization steadily increases over project life Increase in Production and Labor Costs Modest increase in needed managers

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Negative net cash flow in 2009 followed by steady increase through project life Positive NPV based on cash flow $10,772.75

◦ May not meet projected utilization ◦ Competition doesn’t allow selling price increase ◦ Number of managers hired not commensurate with increase in capacity utilization and hourly workers added

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Equity Beta Capital Asset Pricing Model Debt to Value Ratio Cost of Debt
◦ 9.35% ◦ 20.9% ◦ 7.5%...

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"Hansson Private Label". Anti Essays. 16 Dec. 2018

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APA Citation

Hansson Private Label. Anti Essays. Retrieved December 16, 2018, from the World Wide Web: http://parimatch-stavka7.com/free-essays/Hansson-Private-Label-321121.html


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