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2008

Key Factors in Acquiring and Selling a Distribution Company

Finance, Mergers & Acquisitions, Subscriber Only /

PCE Investment Bankers’ Jon Skelly outlined considerations in acquiring and selling a company.
 
Acquiring?

  • Accelerate Growth Rate
    Look at how acquisition will help you supplement organic growth; acquisitions are often quicker and more certain growth vehicles than greenfield branches.
  • Diversification
    Look at how acquisition will broaden your geographic reach or your current product offering.
  • Improve Operational Performance
    Look at opportunities to acquire strong operators and implement their core competencies within the base business; consider access to management, sales and branch talent.
  • …
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Commentary: Bar is Raised in Mergers & Acquistions Climate

Finance, Mergers & Acquisitions, Perspective, Subscriber Only /

Is it a buyer’s or a seller’s market in wholesale distribution mergers &acquisitions? I think the answer is both, as there are a lot more variables on how value is being measured than even a year ago. If you run a tight ship and considering a sale, your value is still historically high. If you are a buyer with a clear strategy and view of current markets, there are great opportunities.

As this issue’s lead article details, the feeding frenzy of the past few years in wholesale distribution merger &acquisition activity is over. But note carefully that deal-making is not. Mega-deals with double-digit EBITDA valuations have cooled in risk-averse credit and economic climates. Well-managed smaller distribution companies are in some ways more marketable than ever, particularly as …

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Price is an Issue, But Not the Issue

Sales & Marketing, Subscriber Only /

This article examines four common mistakes made by salespeople that lead to competing on price and what you can do about it.
 
You’ve hired a dedicated sales force. Your company has the best product. Great service is delivered after the sale. So why is your team losing sales to low price?”Here are four reasons we see when working with individuals and sales teams:
 
1. Wrong Audience     
If you’re trying to sell ice to an Eskimo, you’re in front of the wrong prospect! Let’s face it, you could be Zig Ziglar and still not close the sale if you are not selling to a real prospect.

Knowledge, business acumen and excellent selling skills are useless if they are not in front of a prospect that values the expertise. …

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Canada Wholesale Trade: 2007 in Review

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

Wholesale sales in Canada continued their upward trend, posting strong growth for the fourth straight year in 2007.
 
Increased demand for agricultural products in the other products”sector led the growth with its best showing since 2003, according to “Wholesale Trade: The Year 2007 in Review,”a recently released report from Statistics Canada. Machinery and electronic equipment sales, which accounts for 21 percent of wholesale sales, also contributed by posting gains higher than total wholesale growth.
 
Nationally, wholesale revenues increased 5.5 percent to $517.8 billion. Since 2002, the rate of wholesale sales growth has averaged 5 percent, almost double growth for the economy as a whole, which posted average …

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MDM June 10, 2008

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 info@mdm.com to …

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U.S. Market Analysis: Plastics MRO

Economic Trends, Finance, Market Analysis, Research & Analytics, Subscriber Only /

The industrial product group listed here – Plastics MRO – represented a market in 2007 of $11.3 billion, according to estimates by Industrial Market Information, Minneapolis. 
 
These charts show the top ten industries, by SIC code, consuming these products; and the 2007 end-user consumption of these groups sorted by the nine government market …

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Monthly Wholesale Trade: April 2008

Economic Trends, Research & Analytics, Subscriber Only /

April 2008 sales of merchant wholesalers were $390.3 billion, up 1.4 percent from the revised March level and were up 12.7 percent from the April 2007 level. The March preliminary estimate was revised upward $0.7 billion or 0.2 percent. April sales of durable goods were up 2.3 percent from last month and were up 7.3 percent from a year ago. Compared to last month, lumber and other construction materials were up 5.9 percent and sales of furniture and home furnishings were up 5.2 percent. Sales of nondurable goods were up 0.6 percent from last month and were up 17.8 percent from last year. Sales of paper and paper products were up 6.2 percent from last month and sales of grocery and related products were up 1.8 percent.
 
Inventories. Total inventories of merchant …

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MDM News Digest 3811

Free, Subscriber Only /

Grainger’s Canadian subsidiary Acklands-Grainger Inc. has acquired Excel Industriel, Granby, Quebec. Excel is a business-to-business broad line distributor of maintenance, repair and operating (MRO) supplies. The company expects an incremental sales contribution of $11 million from the acquisition over the next 12 months. More
Airgas, Inc., Radnor, PA, has agreed to buy Energy Safety Services Inc., doing business as Oilind Safety, based in Phoenix, AZ. The provider of rental safety equipment and safety services had $21 million in sales in 2007. Oilind Safety will operate as a stand-alone company within a new Airgas organization that includes construction and rental businesses.

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MDM News Digest 3811 Read More »

Report: PT/MC Sales in U.S., Canada Grow in April

Economic Trends, Free, Power Transmission/Motion Control/Fluid Power, Research & Analytics, Subscriber Only, Top Distributor Sectors /

U.S. distributors’overall sales of PT/MC products climbed 6.4 percent in April 2008 compared to March 2008, according to April 2008 month-end trend data from the Power Transmission Distributors Association.
 
When matched up against sales in the same month last year, sales in April 2008 were up 11.5 percent. Accounts receivable collection days fell 4.3 percent since March 2008. The confidence index of U.S. distributors held steady for the fifth month in a row at 5.8 (on a 10-point scale).
 
Canadian distributors also reported a rise in PT/MC sales, gaining 8.6 percent in April 2008. Sales over the same period last year were up 6.6 percent. Accounts receivable collection days dropped 6.9 percent compared to March 2008. In April 2008, the confidence level of Canadian …

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April Machine Tool Consumption Down 27.6% from March

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

April U.S. manufacturing technology consumption totaled $396.47 million, according to the Association for Manufacturing Technology and the American Machine Tool Distributors’Association. This total, as reported by companies participating in the USMTC program, was down 27.6% from March, but up 29.2% from the total of $306.86 million reported for April 2007. With a year-to-date total of $1,587.27 million, 2008 is up 19.9% compared with 2007.

These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTC program.

The demand for manufacturing equipment continues to be healthy, with year-to-year growth of nearly 30% since April 2007,”said John B. Byrd III, AMT president. “Export demand for U.S. …

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Acklands-Grainger Acquires Excel Industriel

Companies, Facilities Maintenance (MRO), Finance, Free, Mergers & Acquisitions, News, Subscriber Only, Top Distributor Sectors /

Grainger’s Canadian subsidiary Acklands-Grainger Inc. has acquired Excel Industriel, Granby, Quebec. Excel is a business-to-business broad line distributor of maintenance, repair and operating (MRO) supplies.
 
The company expects an incremental sales contribution of $11 million from the acquisition over the next 12 months. The two existing Acklands-Grainger and Excel branches in Granby will be merged.
 
W.W. Grainger, Inc., with 2007 sales of $6.4 billion, is a broad line supplier of facilities maintenance products serving businesses and institutions in Canada, Mexico and the U.S., with a growing presence in Shanghai, …

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RBC Bearings Buys Precision Industrial Components

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

RBC Bearings Inc., Oxford, CT, international manufacturer of highly-engineered precision plain, roller and ball bearings for the industrial, defense and aerospace industries, has acquired Precision Industrial Components LLC (PIC Design), Middlebury, CT, for $6.6 million in cash and assumption of debt.
 
PIC Design is a manufacturer and supplier of tight-tolerance, precision mechanical components for use in the motion control industry. PIC Design has over 20,000 active customers and generated revenues of $10 million for the year ended Dec. 31, 2007.
 
RBC Bearings operates 22 manufacturing facilities in four …

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Power Transmission/Motion Control Product Sales Grow in April

Economic Trends, Free, News, Power Transmission/Motion Control/Fluid Power, Research & Analytics, Subscriber Only, Top Distributor Sectors /

U.S. distributors’overall sales of PT/MC products climbed 6.4% in April 2008 compared to March 2008, according to April 2008 month-end trend data from the Power Transmission Distributors Association. When matched up against sales in the same month last year, sales in April 2008 were up 11.5%. Accounts receivable collection days fell 4.3% since March 2008. The confidence index of U.S. distributors held steady for the fifth month in a row at 5.8 (on a 10-point scale).
 
Canadian distributors also reported a rise in PT/MC sales, gaining 8.6% in April 2008. Sales over the same period last year were up 6.6%. Accounts receivable collection days dropped 6.9% compared to March 2008. In April 2008, the confidence level of Canadian distributors was held constant for the third month …

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Power Transmission/Motion Control Product Sales Grow in April Read More »

Airgas Agrees to Buy Oilind Safety

Companies, Finance, Free, Gases & Welding Equipment, Mergers & Acquisitions, News, Subscriber Only, Top Distributor Sectors /

Airgas, Inc. Radnor, PA, has agreed to buy Energy Safety Services Inc., doing business as Oilind Safety. The provider of rental safety equipment and safety services had $21 million in sales in 2007.
 
Oilind Safety, which is based in Phoenix, AZ, will operate as a stand-alone company within a new Airgas organization that includes construction and rental businesses.
 
Oilind Safety has 16 locations, mostly in the Western U.S.
 
Oilind Safety provides rental safety equipment, such as fall protection, breathing air and gas monitoring systems, and safety management services for audits, training and emergency response planning.
 
Airgas, Inc. is a U.S. distributor of industrial, medical, and specialty gases, and hardgoods, as well as safety products, …

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April Construction Spending: Down 0.4% From March

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

Construction spending in April 2008 was estimated at a seasonally adjusted annual rate of $1,120.9 billion, 0.4% below March, according to the U.S. Census Bureau of the Department of Commerce.
 
April was 3.9% below the April 2007 estimate of $1,166.2 billion.
 
During the first four months of this year, construction spending amounted to $331.6 billion, 2.8% below the $341.2 billion for the same period in 2007.
 
Private Construction
Spending on private construction was at a seasonally adjusted annual rate of $823.8 billion, 0.5% below the revised March estimate of $827.7 billion. Residential construction was at a seasonally adjusted annual rate of $435.8 billion in April, 2.3% below the revised March estimate of $445.8 billion. Nonresidential …

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Why Some Companies Draw Smaller Premiums in the M&A Market

Finance, Free, Mergers & Acquisitions, Subscriber Only /

What does an A” company look like?

In MDM’s recent Webcast, Distribution M&A 2008 Update: Value Redefined in a Tough Market -order the recorded presentation/transcript here -Evergreen Consulting’s Brent Grover addressed why some companies draw smaller premiums in the M&A marketplace.

One factor: the quality of the distributor’s assets. Smaller companies generally draw a smaller premium but can boost their value to the higher end if they consider the following, according to Grover:

“It will have a well-balanced sales force meaning, not being overly dependent on any one or two salespeople. The sales force will have a good balance of age and experience so they’re not all going to …

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WinWholesale Opens Three Locations in East

Companies, Finance, Free, HVACR, Mergers & Acquisitions, News, Plumbing Products & PVF Distribution, Subscriber Only, Top Distributor Sectors /

WinWholesale Inc., Dayton, OH, has opened three Winnelson locations on the East Coast and in the Southeast.

The new Winnelson companies provide plumbing supplies, equipment and accessories to residential and commercial plumbing contractors.

The recently opened companies and locations are: Ocala Winnelson Company, Ocala, Fla., serving central Florida; Salisbury Winnelson Company, Salisbury, MA, serving the Cape Ann region and New Hampshire seacoast; Shelby Winnelson Company, Shelby, NC, serving Cleveland and Rutherford counties in the southwest part of the state.

Each location has a warehouse, counter sales and pickup, and local delivery service.
 
WinWholesale has opened nine Win companies since the first of the year -five Winnelson, two …

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Staples Moves to Buy Corporate Express

Finance, Free, Mergers & Acquisitions, News, Operations, Paper Products & Packaging Distribution, Subscriber Only, Top Distributor Sectors /

Staples Inc. has bought a 12.3% stake in Corporate Express. The move is the latest in Staples’ bid to take over the global office supplies distributor.
 
Corporate Express announced June 5 it would meet with Staples to discuss the company’s increased offer of €9.15 per share for the distributor (roughly US$2.5 billion total). The bid follows previous offers, which were rejected by Corporate Express earlier this year.
 
Staples’ offer is contingent on Corporate Express shareholders’ rejection of a planned merger between Corporate Express and European office supplies distributor Lyreco SAS. The transaction was announced on May 21. According to a recent news release, the merger with Lyreco would create a €7.8 billion B2B player in Europe, North America and …

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Veyance Technologies Broadens Conveyor Belt Offering

Free, News, Subscriber Only, Top Distributor Sectors /

For the second time this year, Veyance Technologies, Inc., Birmingham, AL, is broadening its conveyor belt installation, splice and repair service footprint to support coal producers.

The manufacturer of Goodyear Engineered Products has agreed to buy National Belt Service, or NBS, based in Bessemer, AL, with additional operations in Wheeling and Charleston, WV, and Atlanta, GA.

NBS employs 75 associates and has annual revenue of $20 million.

In February, Veyance bought Monk Mining Supply, a coal mining conveyor belt service company based in Tazewell, VA.
 
Veyance said its entry into conveyor belt services for coal mines complements its existing network of authorized distributors. Our distributors are the core of our marketing strategy and that won’t …

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Premier Farnell Sales Up 6% in 1Q

Free, News, Subscriber Only, Top Distributor Sectors /

Premier Farnell, a UK-based industrial distributor, reported sales in the first quarter 2008 were up 6% to £199 million (US$389 million at current exchange rates).
 
Sales in China were up 57%, and sales in Eastern Europe and India were up 60%. Web sales were up 31% year-on-year. The distributor reported sales in mainland Europe were up double …

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Premier Farnell Sales Up 6% in 1Q Read More »

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