CONSOLIDATION CONTINUES

There is a trend in business today, you can see it in the mergers of big companies. Nextel and Sprint are an example. Chrysler and Diamler Benz another they are all around us spurred on by increasing competition in the Global market place.

If you are a baby boomer you can remember when the phone company was well, the phone company. Ultimately this monopoly was broken up by the Government. Broken up because monopoly was equated with no competition, poor service and high prices.

Broke it up they did and now, less than a generation later, like great amorphous blobs of organic mercury they are coalescing again into quasi monopolistic giants.

Now there is lots of competition, innovation and prices have gone down, right? Well sort of. One could say that long distance is a lot cheaper than it once was and surely mobile phones are affordable to almost any one.

It is clear in the new global economy that consolidation is a fact of corporate survival. Consolidation is good for the corporation, it remains to be seen if it will be good for the consumers.

The first aid industry has followed a similar path. In the beginning, way back when a new industry was invented by a visionary entrepreneur. Zee Medical began serving the industrial market place with top quality first aid and safety products. The idea was similar to the coffee service company in that once you placed your coffee pot (first aid cabinet) then a route person would come around on a regular basis and replenish the consumable coffee, filters, creamer, sugar etc. (Bandages, Antiseptics and Aspirin).

Zee operated without competition of any significance until the late 70’s and early 80’s when small regional companies began to challenge Zee for a fair share of the market.

In less than a decade numerous small companies sprung up to supply the growing ranks of independent distributors who wanted a piece of the action.

The main players were Respond Systems, Life and Safety Products, Mr. First Aid, Dot First Aid, Affasco, American First Aid, Greenguard, Affirmed Medical, Medique, and Swift First Aid.

These companies all grew and prospered into the 1990’s and together captured a significant market share which of course made them yummy little acquisition targets of the big boys.

In the mid to late 1990’s Cintas started buying these profitable regional distributors. Affirmed Medical, Life and Safety Products and American First Aid were quickly gobbled up. Their distributors were reassured that all is well that business will continue as usual.

Of course what we didn’t know was that Cintas was buying individual distributors as well with an eye on running company owned stores.

Founders of these smaller companies were bought or pushed out and company men/women came in to run the show.

It was during this corporate acquisition spree that we went our independent way and took our business to the newly forming First Aid Direct and had a very happy, mutually profitable relationship that lasted most of a decade. That was until Cintas acquired Van Dyne Crotty an Ohio based Uniform company who had acquired a controlling interest in First Aid Direct.

The rest as they say is history. Cintas decided not to continue the First Aid Direct Brand leaving us with the choice of finding a new source for that part of our product line or do business with the new Cintas entity. We opted for the independent path.

So the trend is consolidation and two giants have emerged, they are of course Zee Medical and Cintas. You might not recognize this trend because Cintas is still operating American First Aid, Affirmed Medical and Respond Systems as their own brands along with their Cintas First Aid brand.

Zee Medical was not acquisition proof either and is today a wholly owned subsidiary of McKesson, which is owned by Merc.