Publications
Publications
- March 2017
- HBS Case Collection
Cantel Medical
By: John R. Wells and Gabriel Ellsworth
Abstract
Cantel Medical Corporation provided infection prevention and control products and services for patients, caregivers, and other healthcare providers. In 2016, Cantel generated sales of $665 million and net profits of $60 million, double the levels of five years earlier. Chief Executive Officer Jørgen B. Hansen, appointed on August 1, 2016, was aiming to double the size of the business again. Cantel operated in three major vertical market segments: endoscopy, water purification and filtration, and healthcare disposables, which together accounted for more than 95% of Cantel’s sales. Over 90% of revenues were generated in North America. Hansen was looking to add new verticals to the portfolio, but he also saw opportunities to drive growth in Cantel’s core businesses, both at home and internationally. Over two decades, the company had delivered consistent organic growth and integrated over 30 acquisitions, providing total annual returns of 22% to its shareholders, with relatively limited leverage. Hansen was determined to maintain that track record, but the key question was how to achieve this goal. Was there enough growth in Cantel’s three key verticals in North America, or would more be needed? If so, which other verticals should Cantel consider? Should the company stick to infection control or add other products to its offering to leverage its customer relationships? How much would a drive into international markets help? And what organization was best suited to Cantel’s strategy? It had been run as a holding company in the past. Did that structure still make sense as the company ventured overseas?
Keywords
Cantel; Charles Diker; Furniture Industry; Matrix Organization; Acquisition; Mergers and Acquisitions; Business Conglomerates; Business Units; Business Growth and Maturation; Business Organization; For-Profit Firms; Chemicals; Profit; Revenue; Geographic Scope; Multinational Firms and Management; Health; Health Care and Treatment; Business History; Business or Company Management; Goals and Objectives; Growth and Development Strategy; Organizational Structure; Problems and Challenges; Research and Development; Opportunities; Strategy; Adaptation; Business Strategy; Competitive Strategy; Corporate Strategy; Diversification; Expansion; Information Technology; Biotechnology Industry; Chemical Industry; Health Industry; Manufacturing Industry; Medical Devices and Supplies Industry; Pharmaceutical Industry; United States; New Jersey
Citation
Wells, John R., and Gabriel Ellsworth. "Cantel Medical." Harvard Business School Case 717-482, March 2017.