2007 - Page 27 of 47 - Modern Distribution Management

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2007

The Gray Market and Distribution

Legal Issues in Wholesale Distribution, Operations, Subscriber Only /

The gray market is ill-defined and can range from legitimate goods intended for sale elsewhere sold in an unauthorized area, to outsourced manufacturers who generate more product than that ordered by an OEM, to goods that are remanufactured after use, to pure piracy. Here's a look at a recent case between a manufacturer and distributor.

Recently, Hewlett-Packard resolved a gray market" lawsuit that it filed in a federal district court in Tennessee against one of its by-then terminated distributors and one of the distributor's customers.

In essence, HP claimed that its distributor violated the terms of its authorized reseller agreement by purchasing products at deep discounts and then selling the products to a customer not authorized by HP.

The …

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Schneider Electric Continues Campaign Against Counterfeiting

Electrical, Free, Legal Issues in Wholesale Distribution, Operations, Subscriber Only, Top Distributor Sectors /

North American Breaker Co. (NABCO) has been enjoined in federal court from buying or selling virtually all Square D QO circuit breakers, and two other companies -CES Liquidating Inc. and TES Liquidating LLC -have been enjoined from selling any of Schneider Electric’s Square D products.

Square D filed suit against NABCO on July 26, 2006, contending that the company placed 50,594 counterfeit Square D circuit breakers into the field. In the suit, Square D alleged that NABCO was guilty of trademark infringement.

Counterfeit Square D products pose serious health and safety hazards to innocent customers,” said Bill Snyder, vice president-channel distribution for the Schneider Electric North American Operation Division. “Through this lawsuit and others like it, Square D has …

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Commentary: Dust Won’t Settle on HD Supply

Companies, Finance, Free, Mergers & Acquisitions, Perspective, Subscriber Only /

Be careful not to get a sugar high from the HD Supply spin-off announced this past week. After a deal of this magnitude, it’s easy to get excited about what it means once the dust settles. But the dust won’t settle on HD Supply. If anything, the non-contributing or distracting units will be shed and a leaner, more focused business will emerge. It was not purchased to be gutted or dismantled. The remaining entity, while smaller in size, will likely continue as the lead consolidator in a narrower band of distribution verticals.

The deal will have a large impact in a few sectors, and virtually no impact in others beyond the perceived valuation halo effect. Some had anticipated the price for HD Supply might cool slightly due to the weakness of residential markets in North America. …

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MDM News Digest 3712

Free, Subscriber Only /

Five U.S.&nbsp ; producers of steel nails have filed antidumping duty petitions alleging that dumped imports of nails from and the United Arab Emirates (UAE) are causing material injury to the domestic industry. The petitioners allege antidumping margins of 59 percent to 136 percent for and 98 percent to 114 percent for the UAE. The petitioners are Mid Continent Nail Corporation, Poplar Bluff, Davis Wire Corporation, Irwindale, Gerdau Ameristeel Corporation (Atlas Steel & Wire Division),

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MDM News Digest 3712 Read More »

Grainger by the Numbers: 2007 Factbook

Companies, Facilities Maintenance (MRO), Subscriber Only, Top Distributor Sectors /

W.W. Grainger, Chicago, IL, $5.9 billion broad-line distributor of facilities maintenance products, sells primarily to industrial and commercial maintenance departments, contractors and government customers. The company has been driving two initiatives: market expansion, which is nearly finished in the U.S., and product expansion. Grainger recently released its 2007 Factbook, which is full of statistics on its operations in the U.S., Mexico, China and Canada. The following graphics, presented in the document below, were pulled from that Factbook, which is available on Grainger’s Web site,

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MDM June 25, 2007

Subscriber Only /

This is the pdf of this issue of Modern Distribution Management. Apply the full $24.95 pay-per-view cost toward an annual subscription (within 30 days of purchase), which includes two issues a month plus access to more than six years of online archives and market data. Call 1-888-742-5060 or email [email protected] to …

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MDM June 25, 2007 Read More »

Hagemeyer CEO to Resign in ’08

Companies, Electrical, Free, News, Subscriber Only, Top Distributor Sectors /

Hagemeyer, Naarden, the Netherlands, announced that Rudi de Becker will resign as CEO and chairman of the Board of Management of Hagemeyer at the next annual general meeting of shareholders in April 2008.
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Hagemeyer said that De Becker wants to spend more time with his family.
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Commenting on the resignation of de Becker, Adri Baan, chairman of the Supervisory Board said: Rudi de Becker joined Hagemeyer after a period of financial difficulties and he has made a significant contribution to Hagemeyer’s recovery. We regret but respect his decision and we trust that a suitable successor will be found.”
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Hagemeyer is a distributor of electrical parts and supplies, safety and other MRO products in 25 countries in Europe, North America and …

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SKF Acquires Baker Instruments Co.

Finance, Free, Mergers & Acquisitions, News, Power Transmission/Motion Control/Fluid Power, Subscriber Only, Top Distributor Sectors /

SKF has acquired Baker Instruments Company, Fort Collins, CO, a manufacturer of test and diagnostic instruments for electric motor assessment. Baker has sales of $11 million.
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This move into electric motor diagnostics is important to our new Energy Efficiency solutions business, and is in line with the SKF Group’s move towards supporting our customers in their Sustainability efforts,” said Phil Knights, president, SKF Service Division.
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Baker’s sales are mainly focused on the industrial motor users in the U.S.
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SKF paid $14 million for the company. Baker will be part of SKF Reliability Systems within the Service …

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SKF Acquires Baker Instruments Co. Read More »

New Owners: HD Supply Will Maintain Acquisitive Strategy

Companies, Finance, Free, Mergers & Acquisitions, News, Subscriber Only /

HD Supply’s new owners said that it is premature to say whether they will divest any of the $12 billion distributor’s assets after taking full ownership, said David Novak, a partner at Clayton Dubilier & Rice, one of the three private equity firms that have agreed to buy the unit from The Home Depot Inc. for $10.3 billion.
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Bain Capital LLC, Carlyle Group and CD & R are splitting the investment evenly, Novak said.
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Though there are no immediate plans for HD Supply’s current assets, the new owners do plan to continue building the company through acquisitions. That we will certainly do,” Novak told MDM. “Local scale is very important for productivity and service levels.”
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That means that HD Supply, with $12 billion in sales in 2006, will continue …

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New Owners: HD Supply Will Maintain Acquisitive Strategy Read More »

VWR International, Inc. Acquires Denmark-based Distributor

Companies, Facilities Maintenance (MRO), Free, News, Subscriber Only, Top Distributor Sectors /

VWR International, Inc., West Chester, PA, a supplier to the global research laboratory industry, has agreed to acquire Bie & Berntsen A-S, a Danish scientific laboratory supply distributor.
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Bie & Berntsen is one of Denmark’s largest suppliers of chemical and laboratory equipment with 90 employees, all in Denmark. The company has annual revenues of US$27 million.
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Manuel Brocke-Benz, VWR senior vice president and managing director of European operations, said: The combination of VWR International and Bie & Berntsen is a perfect fit. VWR’s expertise in chemicals, consumables and life science products, combined with Bie & Berntsen’s emphasis on instruments, equipment and technical service, will enhance our product and service offerings to our customers and …

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VWR International, Inc. Acquires Denmark-based Distributor Read More »

Schneider Enters Negotiations to Sell Unit to Eaton

Electrical, Free, News, Subscriber Only, Top Distributor Sectors /

Schneider Electric has entered into exclusive negotiations with diversified industrial manufacturer Eaton Corp. for the divestment of MGE UPS Systems. The expected move is to fulfill a commitment to the European Commission following the acquisition of American Power Conversion.
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Eaton is offering 425 million euros (US$569 million) for the business, which had revenues of 156 million euros (US$209 million) in 2006.
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MGE UPS Systems, a Schneider subsidiary, is a supplier of a full range of equipment: uninterruptible power supplies, static transfer switches, harmonic filters and advanced power management solutions. It has customers in more than 100 …

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Takeaways from the $10B HD Supply Deal

Companies, Finance, Free, Mergers & Acquisitions, Subscriber Only /

Home Depot’s announcement that it is selling its wholesale division HD Supply for $10.3 billion to a trio of private equity firms -Bain Capital, Carlyle Group and Clayton Dubilier & Rice -is hardly a surprise, given the media coverage that led up to it. Though we don’t know all the details yet, there are already a few takeaways from the news:
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1. As Grainger President and COO Jim Ryan said in mid-May (Grainger: Consolidation is Changing Marketplace), just because HD Supply has been been sold does not mean that it disappears as a player in the market. Still, HD Supply’s new owners will have the same …

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Reliance Steel Agrees to Buy Clayton Metals

Finance, Free, Mergers & Acquisitions, Metals Service Centers, News, Subscriber Only, Top Distributor Sectors /

Reliance Steel & Aluminum Co., Los Angeles, CA, has agreed to acquire Clayton Metals, Inc., Wood Dale, IL.
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Clayton Metals specializes primarily in the processing and distribution of aluminum, stainless steel and red metal flat-rolled products, custom extrusions and aluminum circles through its metals service center locations in Wood Dale, IL; Cerritos, CA; High Point, NC and Parsippany, NJ.
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Clayton Metal’s sales for the 12 months ended Dec. 31, 2006, were about $123 million. Current management is expected to remain in place.
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Reliance Steel & Aluminum Co. is one of the largest metals service center companies in the U.S. Through a network of more than 180 locations in 37 states and Belgium, Canada, China and South Korea, the company …

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Home Depot: Selling Supply Not an Easy Decision

Companies, Finance, Free, Mergers & Acquisitions, News, Subscriber Only /

Home Depot CEO Frank Blake said Wednesday that selling HD Supply in pieces would have been&nbsp ; time-consuming and&nbsp ; distracting, with an added cost of separating the businesses. An IPO would have resulted in a multiple discount relative to the sale of the entire business.
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This was not an easy decision,” Blake said about the announcement Tuesday that Home Depot would sell its $12 billion wholesale division in its entirety for $10.3 billion to a group of three private equity firms. “(HD Supply chief) Joe DeAngelo and his team have built a world-class operation over the last few years. We gave careful consideration to a number of options, including holding onto the business.”
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The three private equity firms buying HD Supply for roughly 10X-12X EBITDA are …

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Eaton Buys Pulizzi Engineering

Companies, Electrical, Finance, Free, Mergers & Acquisitions, News, Subscriber Only, Top Distributor Sectors /

Diversified industrial manufacturer Eaton Corporation, Cleveland, OH, has acquired Pulizzi Engineering, a manufacturer of AC power distribution, AC power sequencing, redundant power and remote-reboot power management systems. Pulizzi Engineering had 2006 sales of $12 million and is in Santa Ana, CA.
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Eaton Corporation is a diversified industrial manufacturer with 2006 sales of $12.4 billion. …

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Home Depot to Sell HD Supply for $10.3B (updated)

Companies, Finance, Free, Mergers & Acquisitions, News, Subscriber Only /

The Home Depot, Atlanta, GA, has agreed to sell HD Supply to a team of private equity firms -Bain Capital LLC, Carlyle Group and Clayton Dubilier & Rice Inc. -for $10.3 billion, or roughly 10X-12X EBITDA.
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The sale has been expected for weeks now, with a number of private equity firms rumored to have bid for the unit and several to have bowed out due to the down housing market -one of HD Supply’s key customer bases. HD Supply reported a decrease in organic sales in the recent quarter.
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For that reason, the firms likely paid closer to 12X EBITDA, according to Jim Miller, principal and a managing director at investment banking firm Vetus Partners, Cleveland, OH. When they started this process, I believe they were touting approximately $1 billion of EBITDA …

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Home Depot to Sell HD Supply for $10.3B (updated) Read More »

Housing Starts Down From April

Building Materials/Construction, Economic Trends, Free, News, Research & Analytics, Subscriber Only, Top Distributor Sectors /

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for May 2007:
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Building Permits
Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,501,000. This is 3% above the revised April rate of 1,457,000, but is 21.7% below the revised May 2006 estimate of 1,918,000.
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Single-family authorizations in May were at a rate of 1,056,000; this is 1.8% below the April figure of 1,075,000. Authorizations of units in buildings with five units or more were at a rate of 379,000 in May.
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Housing Starts
Privately-owned housing starts in May were at a seasonally adjusted annual rate of …

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Actuant Reports 22% Sales Increase

Free, News, Subscriber Only, Top Distributor Sectors /

Actuant Corporation, Milwaukee, WI, reported sales of $385 million for the third quarter ended May 31, 2007, up 22% over the same period a year ago. Net earnings were $29.6 million, about the same as a year ago.
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The Industrial Segment generated double-digit core sales growth while the Actuation Systems Segment reported a year-over-year sales decline due to prior-year convertible top launches and the North American heavy duty truck pre-buy.
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Sales for the nine months ended May 31, 2007 were $1.069 billion, or 22% higher than the $877 million in the comparable prior-year period. Excluding the impact of foreign currency rate changes and sales from acquired businesses, core sales increased …

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Canadian Manufacturing Shipments Down in April

Economic Trends, Free, News, Research & Analytics, Subscriber Only /

Following a strong gain in March, Canadian manufacturing shipments edged down in April. Shipments decreased by&nbsp ; 0.6% to an estimated&nbsp ; $49.7&nbsp ; billion.
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Excluding the motor vehicle parts and accessory industries, manufacturing shipments increased&nbsp ; 1% in April.
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At&nbsp ; 1997&nbsp ; prices, shipments rose&nbsp ; 0.5% to&nbsp ; $45&nbsp ; billion. The constant dollar measurement takes price fluctuations into account. This was the fifth volume advance in six months.

Shipments declined in&nbsp ; 12&nbsp ; of&nbsp ; 21&nbsp ; manufacturing industries, which represent about&nbsp ; 51% of total output.
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Shipments of non-durable goods increased for the third consecutive month in April, rising&nbsp ; 0.7% to&nbsp ; $22.5&nbsp …

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Timken Raises Prices on Bar, Tubing Products

Free, News, Power Transmission/Motion Control/Fluid Power, Sales & Marketing, Subscriber Only, Top Distributor Sectors /

The Timken Company, Canton, OH, has increased prices on double and triple thermal treated product, effective with shipments from Jan. 1, 2008. Bar product prices will increase by $50 a ton, and tubing product prices will go up by 10%.
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Prices on as-rolled and single thermal treated products are not affected.
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Timken is a $5 billion manufacturer operating in 26 countries and 25,000 …

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