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In 2005, Rayovac announced acquisitions totaling $1.5 billion, which encompassed the purchases of United Industries and of Tetra Holdings and aimed at making Rayovac the most "significant global player in the pet supplies industry." These acquisitions were the latest in a series, going back to 1999, that gave Rayovac, significant market presence in new product categories, including lawn and garden care, household insecticides and pet foods. Through such acquisitions, Rayovac grew from $400 million in sales in 1996 to approximately $2.8 billion in 2005. In recognition of this major shift in both composition and direction, the company changes its name from Rayovac to Spectrum Brands.

Rayovac was established in Madison, WI, in 1906 as the French Dry Battery Company. After changing its name to Rayovac in 1921, the company became one of the best known battery brands in the U.S. and quickly established itself as the leading marketer of value-brand batteries in North America.

In 1996, after seeing its market share steadily eroded by Duracell, Energizer, and Panasonic (owned by Matsushita), the company was purchased by private equity firm Thomas H Lee Partners (THL). At the time, revenues were approximately $400 million. THL sought to revive the Rayovac brand name by growing the company through acquisitions. Initially, acquisitions focused on the battery business, but later included businesses focused on shaving products and personal care. This strategy met with some success as Rayovac increased its U.S. market share from 27% to 34% between 1996 and 2001.

Historically most of the company's growth had been in North America. However, beginning in 2002, the company began to selectively acquire battery manufacturers and distributers in key foreign markets in an effort to establish a strong global presence. Then in 2003, the company acquired Remington Products in its first move to diversify away from consumer batteries. According to David Jones, CEO of Rayovac Corporation, the company's diversification efforts had only begun.

In 2003, the global battery market was worth approximately $24 billion, with the United Stated accounting for about one-third of total consumption. Between 1990 and 2000, the United States achieved an annual growth rate of 7.4 per cent in alkaline battery products. Rayovac Corporation accompanied this trend but lagged behind Duracell and Energizer in the United States. The intensely competitive U.S. battery market led to considerable price discounting and required significant advertising and promotion expenditures. Rayovac, as the No.3 player, had to carefully choose its competitive strategy, its product line composition and features, its price points, its cost position, its distribution channels and its advertising strategy in order to be able to close the competitive gap.

Investment analyst Alyce Lomax described Rayovac's move into pet supplies as "diworsification" a term that described "companies that lose their primary focus in their quest to jumps tart growth through diversification." Even so, most analysts hailed the deal, while investors sent the company's stock up nearly 10 per cent immediately following the renouncement. Overall, the company's stock had risen from about $15 to around $45 in the two years since its acquisition of Remington

Attachment:- discussion.rar