Go to main content
Harvard Business School
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions

Faculty & Research

  • HOME
  • FACULTY
  • RESEARCH
    • Global Research Centers
    • HBS Case Collection
    • HBS Case Development
    • Initiatives & Projects
    • Publications
    • Research Associate (RA) Positions
    • Research Services
    • Seminars & Conferences
    Close
  • FEATURED TOPICS
    • Business and Environment
    • Business History
    • Entrepreneurship
    • Finance
    • Globalization
    • Health Care
    • Human Behavior and Decision-Making
    • Leadership
    • Social Enterprise
    • Technology and Innovation
    Close
  • ACADEMIC UNITS
    • Accounting and Management
    • Business, Government and the International Economy
    • Entrepreneurial Management
    • Finance
    • General Management
    • Marketing
    • Negotiation, Organizations & Markets
    • Organizational Behavior
    • Strategy
    • Technology and Operations Management
    Close

Case | HBS Case Collection | April 2013

Sterling Household Products Company

by William E. Fruhan and Craig Stephenson

  • Print
  • Email

Abstract

Sterling Household Products manufactures and markets a broad line of consumer goods from laundry soap and cosmetics to cleaning, disinfecting, and sanitizing products. The company has many highly regarded brand names and consistently reports impressive sales and profits to the investment community. Despite a record of success, a deeper analysis of financial measures reveals that growth rates for unit volumes, sales, and profits are low. Looking to expand into new markets with strong growth potential, the company considers acquiring the germicidal, sanitation, and antiseptic product unit from Montagne Medical Instruments, a company in the health care industry. This acquisition seems like a natural extension of Sterling's experience and expertise in the market for household cleaning supplies. Both parties reach a tentative agreement on price and Sterling considers whether the proposed investment adds value given the risks involved. Students must perform a comprehensive investment analysis and examine both the qualitative and quantitative issues associated with evaluating a strategic acquisition before making a final recommendation.

Language: English Format: Print 12 pages EducatorsPurchase

Citation:

Fruhan, William E., and Craig Stephenson. "Sterling Household Products Company." Harvard Business School Brief Case 913-556, April 2013.

Related Work

  1. Teaching Note | HBS Case Collection | April 2013

    Sterling Household Products Company (Brief Case)

    William E. Fruhan and Craig Stephenson

    Citation:

    Fruhan, William E., and Craig Stephenson. "Sterling Household Products Company (Brief Case)." Harvard Business School Teaching Note 913-557, April 2013.  View Details
    CiteView DetailsPurchase Related
  2. Supplement | HBS Case Collection | April 2013

    Sterling Household Products Company, Spreadsheet for Students (Brief Case)

    William E. Fruhan and Craig Stephenson

    Citation:

    Fruhan, William E., and Craig Stephenson. "Sterling Household Products Company, Spreadsheet for Students (Brief Case)." Harvard Business School Spreadsheet Supplement 913-558, April 2013.  View Details
    CiteView DetailsPurchase Related
  3. Supplement | HBS Case Collection | April 2013

    Sterling Household Products Company, Spreadsheet for Instructors (Brief Case)

    William E. Fruhan and Craig Stephenson

    Citation:

    Fruhan, William E., and Craig Stephenson. "Sterling Household Products Company, Spreadsheet for Instructors (Brief Case)." Harvard Business School Spreadsheet Supplement 913-559, April 2013.  View Details
    CiteView DetailsPurchase Related

About the Author

Photo
William E. Fruhan
George E. Bates Professor, Emeritus

View Profile »
View Publications »

 

More from the Author

  • Teaching Note | HBS Case Collection | December 2018

    The Case of the Unidentified Industries—2018

    Mihir A. Desai, William E. Fruhan and Leanne Fan

    Teaching Note for HBS No. 219-046.

    Citation:

    Desai, Mihir A., William E. Fruhan, and Leanne Fan. "The Case of the Unidentified Industries—2018." Harvard Business School Teaching Note 219-047, December 2018.  View Details
    CiteView DetailsPurchase Related
  • Case | HBS Case Collection | December 2018

    The Case of the Unidentified Industries—2018

    Mihir A. Desai, William E. Fruhan, Jr., Leanne Fan and Adil Bhatia

    Citation:

    Desai, Mihir A., William E. Fruhan, Jr., Leanne Fan, and Adil Bhatia. "The Case of the Unidentified Industries—2018." Harvard Business School Case 219-046, December 2018.  View Details
    CiteView DetailsEducatorsPurchase Related
  • Case | HBS Case Collection | June 2018

    Burton Sensors, Inc.

    William E. Fruhan and Wei Wang

    Burton Sensors presents a realistic situation where a small, rapidly growing, and profitable temperature sensor original equipment manufacturer (OEM) reaches its debt capacity and seeks equity financing to sustain high growth. The president of the company must decide whether to purchase thermowell machines (a positive NPV project), whether to issue common stock to a private investor at depressed prices to alleviate financial pressure, and whether to acquire another sensor manufacturer in an all-stock deal. All three decisions are interrelated and require different techniques to assess. In particular, the acquisition decision must be analyzed as both an investment and a financing opportunity, as the acquisition could be used to resolve the financial constraint problem. This case thus shows students how corporate investment and financing decisions often interact. The case offers a comprehensive overview of key issues in a typical corporate finance or financial management course, including capital budgeting, debt capacity analysis, security issuance, and acquisitions. It can be used in a first-year MBA course in corporate finance or financial strategy or in an elective MBA course in mergers and acquisitions. It can also be used in upper-year undergraduate finance courses that cover capital budgeting, security issuance, and mergers and acquisitions. The case can also be used as a take-home final exam.

    Keywords: Financing and Loans; Acquisition; Investment; Financial Strategy; Decision Choices and Conditions;

    Citation:

    Fruhan, William E., and Wei Wang. "Burton Sensors, Inc." Harvard Business School Brief Case 918-539, June 2018.  View Details
    CiteView DetailsEducatorsPurchase Related
ǁ
Campus Map
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→ Map & Directions
→ More Contact Information
→ More Contact Information
→ More Contact Information
→ More Contact Information
  • HBS Facebook
  • Alumni Facebook
  • Executive Education Facebook
  • Michael Porter Facebook
  • Working Knowledge Facebook
  • HBS Twitter
  • Executive Education Twitter
  • HBS Alumni Twitter
  • Michael Porter Twitter
  • Recruiting Twitter
  • Rock Center Twitter
  • Working Knowledge Twitter
  • Jobs Twitter
  • Social Enterprise Twitter
  • HBS Youtube
  • Michael Porter Youtube
  • Executive Education Youtube
  • HBS Linkedin
  • Alumni Linkedin
  • Executive Education Linkedin
  • MBA Linkedin
  • Linkedin
  • HBS Instagram
  • Alumni Instagram
  • Executive Education Instagram
  • Michael Porter Instagram
  • HBS iTunes
  • Executive Education iTunes
  • HBS Tumblr
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Privacy
  • Terms of Use
Copyright © President & Fellows of Harvard College