Reaching an Agreement
In 2011, Daikin had made an offer to acquire Goodman, but had to shelve its plans when the 2011 Tohoku Earthquake — the worst earthquake in Japanese history — crippled much of the country.
The devastating natural disaster triggered an immense tsunami, with waves reaching 133 feet in height and six miles inland. The quake moved Honshu, Japan’s largest island, approximately 8 feet and shifted the Earth on its axis an estimated 4 inches.
Despite the devastation, the companies continued to hammer out a deal. On Aug. 29, a definitive agreement between Daikin Industries and the private-equity group that held Goodman was signed. Ebisu and Swift held a joint press briefing on Nov. 7 in Houston to announce the completion of the acquisition.
According to a release from Goodman, “The acquisition brings together recognized leaders in the global HVAC marketplace. Combining the global, environmental, technological, and commercial HVAC expertise of the Daikin Group with the logistical and manufacturing proficiency of Goodman will enable a level of success in the HVAC marketplace not possible as individual companies.”
Daikin Industries Ltd., headquartered in Osaka, Japan, is a Fortune 1000 company with 2011 revenues in excess of $14.5 billion and more than 49,000 employees worldwide, making it one of the largest HVACR manufacturers in the world. Daikin is engaged primarily in the development, manufacture, sales, and aftermarket support of HVACR equipment, refrigerants, and other chemicals, as well as oil hydraulic products. Daikin has manufacturing operations in 18 countries and a sales presence in more than 90 countries. Beyond the Goodman acquisition, Daikin Industries Ltd.’s North American HVACR operations are comprised of McQuay International, American Air Filter, and Daikin AC (Americas) Inc.
Goodman has manufacturing locations in Texas and Tennessee. The company markets primarily under the Goodman and Amana brand names. Its holdings include Quietflex, a flexible air duct manufacturer with plants in Texas, Florida, Arizona, and Pennsylvania. The company has approximately 4,500 employees, with 2011 sales exceeding $2.1 billion.
Swift, who has been CEO of Goodman Manufacturing since 2008, said, “From a Goodman point of view, we see the opportunity to gain access to terrific Daikin technology. Daikin gives us the opportunity to take leadership technology from around the world and now be able to infuse that with Goodman’s low-cost manufacturing capabilities and outstanding distribution network.”
Ebisu, a Daikin senior executive officer, said, “We believe that Goodman’s business management style is wonderful and we really respect it, especially in terms of their production and highly managed supply chain system. Daikin would like to learn and introduce this knowledge to our Daikin group operations in Europe, Japan, and the rest of the world.”
Swift also addressed HVACR contractors, stating, “The reason why Goodman has achieved success is because we focus just on one industry — HVACR. If we’re not successful in HVACR, we will not succeed as a company. The benefit of the relationship that we have with Daikin is they have exactly the same view. They are an HVAC company and that’s all they do.
“Having that aligned focus suggests that, for our customers, we have to be successful. We can’t run to another business to make the quarter, or the year, and I think that kind of resolute focus is very important to business success. That’s why we’ve achieved the success that we have in North America.”
Name: Dave Swift
Company: Goodman Global Group Inc.
Location: Houston, Texas
Notable quote: “We see the opportunity to gain access to terrific Daikin technology.”
Name: Takeshi Ebisu
Title: Senior Executive Officer
Company: Daikin Industries Ltd.
Location: Osaka, Japan
Notable quote: “We believe Goodman’s management style is wonderful and we really respect it.”
Publication date: 12/17/2012