Platinum Equity has agreed to buy Industrial Distribution Group, Inc., Atlanta, GA, distributor of maintenance, repair, operating and production (MROP) products and integrated supply services to manufacturers and other industrial users, for about $113 million. With the acquisition, IDG will go private.
The move complement’s Platinum Equity’s other recent distribution investment: Strategic Distribution. Platinum Equity said it would look for synergies with IDG. Both companies have integrated supply operations.
We are very enthused about this transaction with Platinum Equity, which we believe will provide excellent value to our stockholders,” said Richard M. Seigel, chairman of the Board of the Company, who also chaired the special committee.
Seigel …
Posts By Lindsay Young
MDM spoke with Seth Erickson, vice president of product merchandising for Grainger, about the $6.4 billion facilities maintenance distributor’s product expansion and private label strategies.
Chicago-based Grainger continues to add product to its portfolio, a long-term strategy to provide one-stop shopping for its customers. The strategy, says Seth Erickson, vice president of product merchandising, is driven by customer requests.
We have found that in MRO efficiency is king, and the more efficient we can make our customers, the more valuable we are to them,” Erickson says. In fact, he says that as the economy slows, distributors and their customers must become more efficient and strategically reduce costs by consolidating purchases. “We want to be in a …
Chicago-based Grainger responded to a complaint filed in U.S. District Court in Eastern Wisconsin alleging the distributor had overcharged the U.S. government as well as illegally relabeled products manufactured in non-trade agreement countries so they could be sold to the U.S. government.
Grainger said in a press release that it will meet with the Justice Department to address the issues brought up in the complaint, which was recently unsealed by the U.S. Department of Justice. “The company takes this allegation seriously,” Grainger said. “Although Grainger believes the company has fully complied with its contract, it intends to carefully review the allegations to ensure it meets its obligations to its …
Based on news reports on TV and in the paper, you’d think we were already in a recession. The reality is, we’re not. You can’t be in a recession when the economy is growing,” Institute for Trend Research economist Alan Beaulieu told attendees at this week’s National Association of Wholesaler-Distributors annual meeting in Washington D.C.
He expects the economy to grow at a “tepid pace” in 2008, but that it will indeed grow. The housing slump and credit turmoil have not yet been enough to tip the economy backwards, he says.
As Beaulieu has told many an association meeting, he believes recession is coming -but not until 2009 and 2010. So, instead of reacting to reports that a recession is upon us, he suggests getting proactive and preparing. Think back to the last …
A distribution branch manager in many cases has worked his way through the ranks, but may not have had formal management training. In fact, the average manager may be so busy with his daily work that there hasn't been time to spend on higher-level localized market research and business planning. Wholesaler-distributors need to shift how they view the role of their branch managers by giving them the power to dig deeper into their markets.
Vancouver, BC-based heating, ventilation, air conditioning, and refrigeration distributor Independent Supply Company went from start-up in 2000 to eight branches in Ontario and Western Canada.
In 2006, Independent Supply decided that to maintain that fast growth, it needed to shift how it viewed the job of branch …
Growth in overall macroeconomic activity as measured by Gross Domestic Product (GDP) and growth in the wholesale distribution industry are going to moderate in 2008. That was the message given by Adam Fein in a recent MDM Webcast, Wholesale Distribution Economic Outlook: Adam Fein’s First Look at 2008.” He said: “I believe they will remain positive but there are some significant risks.”
In addition to tackling some high-level economic issues, including the key dynamics behind today’s economy, the economic outlook and implications for key distribution markets, and what Webcast participants should consider as they plan where their company will go in the next year, Fein talked about the key part …
It’s been another roller-coaster year, with HD Supply changing hands and consolidation kicking into high gear. As distributors plan for 2008, opportunities exist for growth, but they may be more difficult to secure as the economy shifts into lower gear.
We thought it couldn’t get more interesting than 2006, when HD Supply bought Hughes Supply for $3.4 billion and recorded triple-digit growth throughout the year -thanks to a still-booming residential market and an aggressive acquisitive growth strategy.
Boy, have things changed.
For one, HD Supply is no longer in the hands of Home Depot and already is starting to shed some of the weight it put on over the past several years. Though it was a big deal when HD Supply was sold to a trio of private equity …
HD Supply has signed a letter of intent to sell its Rheem/Ruud HVAC operations to Watsco Inc., Coconut Grove, FL, an HD Supply spokeswoman confirmed. She said  ; the companies are in the process of due diligence on the deal.
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If it moves forward, the transaction would close in the first quarter of 2008. The assets will become part of Watsco’s Gemaire group in Ft. Lauderdale, FL.
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HD Supply will hold onto its plumbing assets.
The HD Supply Plumbing/HVAC business Web site lists Hughes Supply and Apex Supply Co. as the two companies that made up the division. Former revenue reports do not separate the plumbing from the HVAC sales.
Apex,Atlanta, GA , was …
U.S. companies doing business overseas. But not all manufacturers and distributors are benefiting. For those distributors who import from the euro-zone, for example, costs have suddenly spiked, forcing them to reexamine the way they define value in this marketplace. This article examines the impact of the dollar decline on three groups:
- U.S. importers,
- manufacturers who export to the European Union, and
- Canadian distributors who buy from U.S.-based manufacturers.
Recently, Equipment Controls Co., Norcross, GA, has started to factor the value of the U.S. dollar into its business planning. The gas measurement and control equipment …
The Bureau of Labor Statistics released its employment projections through 2016 this week, and it doesn’t look great for manufacturing.
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Within the goods-producing sector, construction is the only sector projected to grow.  ; Employment in manufacturing is forecast by BLS to decline by 1.5 million jobs. This decline is half of the 3 million manufacturing jobs lost in the previous decade (1996-2006). Employment in goods-producing industries is expected to decrease from 14.9% to 13.1% of total employment.
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Four of the 10 detailed industries with the largest projected wage and salary employment declines are in the manufacturing sector, including printing and related support activities and motor vehicle parts manufacturing.
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That said, we at MDM …
Layoffs and other cost-cutting measures in building materials have begun in earnest, with several distributors and retailers announcing workforce reductions” in the past week.
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The Home Depot, Atlanta, GA, will cut upwards of 950 jobs, many from its three call-center operations that work with customers to install doors and other products. An HD spokesman told Reuters that the closings were not solely due to a down housing market. The retailer wants to give customers a local contact for installation help rather than send them to a call center. Still, HD is hurting, posting a 27% drop in profit in the past quarter.
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UK-based Wolseley said it would cut its workforce in North America by at least 1,300 more this year, mostly in its Stock Building Supply subsidiary. …
The economy and the decline of the dollar top the concerns of many (though not all) distributors and manufacturers, according to the latest MDM survey. Here are the key issues that surfaced in the November poll.
As in the past few years, distributors are paying close attention to consolidation trends among suppliers, competitors, end-users and ERP providers, materials costs, sales force development, supplier relationships, recruiting and retaining talent and controlling benefits costs. Private label, foreign competition and global sourcing have also moved front and center.
We also asked consultants in wholesale distribution to share what they see developing. Here are starting points to help plan for 2008.
1. Plan for …
It seems the M & A game may be shifting back into strategic players’ court. Some recent transactions: 3M is buying PPE supplier Aearo for $1.2 billion, which was partly owned by global private equity firm Permira. Brazos Private Equity Partners is selling industrial master distributor ORS Nasco to a strategic consolidator, United Stationers, for $180 million.
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Rexel is majority-owned by a group of private equity firms, but after it acquires Hagemeyer (assuming the deal for $4.5B will go through), it will sell half the assets to Sonepar, a strategic player, including …
After closing down earlier this week, the largest independent wood flooring distributor in the U.S. at more than $600 million in sales, Hoboken Wood Flooring LLC, Wayne, NJ, has filed a voluntary petition for Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware.
According to a report this week from local paper The Record, sales had fallen about 25% each month for the past year – the commercial business development manager for the company attributed the sales losses to the housing downturn, competition from manufacturers going direct, and the company’s push to expand nationally.
The latter was emphasized in a Floor Covering Weekly report published shortly after private …
A bidding war has possibly been avoided in the fight for Dutch electrical/industrial distributor Hagemeyer’s global assets. Rexel just bid nearly $4.3 billion for the company, but plans to only keep a little over half of Hagemeyer when all is said and done. Sonepar has agreed to buy the rest.
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In an interesting twist, French-based distributor Rexel has made an offer to acquire Hagemeyer, and has agreed to sell certain assets of Hagemeyer to Sonepar if its offer is accepted.
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The move eliminates the possibility of a bidding war between the two electrical distribution giants. It also plays down the risk of buying the entire company.
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Rexel’s offer was made for & euro; 4.60 euro a share in cash, valuing Hagemeyer at & euro; 3 …
Economist Alan Beaulieu (of the Institute for Trend Research) is well-known in the distribution world as a prolific speaker at association events and often remembered for his frightening Recession in 2009-2010 theory. When I asked him recently whether there were opponents to that idea, he replied honestly: Of course.”
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Beaulieu’s forecast is based on the idea that we are already in a slowdown in part due to the housing decline, high interest rates, baby boomers’ approaching retirement (resulting in  ; government budget strain),  ; high oil prices (and the impact that will have on consumer spending) and demand for oil in India and China, inflation and pressure on wages, and a slowdown in business spending. He uses a series of graphs that show how the current trends …
MDM spent the past couple of days at the annual Power Transmission Distributors Association Industry Summit. The summit drew more than 800 participants.
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A few takeaways on the association level:
The PTDA is a leader in the Industrial Careers Pathway initiative, focused primarily on the recruitment of students into industrial distribution programs (and then into industrial distribution careers). As the initiative’s executive director says: “We’re good at talking to each other about problems in recruiting in our industry, but we’re not so good at making a case for our industry to those not in ‘our world.'” The initiative has dozens of …
I spent the past week in Monte Carlo, Monaco, for the European Power Transmission Distributors Association annual convention. Two topics in the meeting’s discussions stuck out to me as noteworthy:
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1 -The focus on designing, manufacturing and selling more environmentally friendly products. Global manufacturer SKF was the most visible in this initiative at the convention, touting the benefits of its product lines that reduce energy consumption (and therefore save customers money) when used in manufacturing processes. While the construction markets are seeing more and more of this as building “green” becomes the norm rather than the exception, I believe going green will grow in importance on the industrial side as customers …
BusinessWeek just ran a couple of articles on Clayton, Dubilier & Rice, the private equity firm that joined with Bain Capital and the Carlyle Group to buy HD Supply. Due to a tightening in the credit markets, the trio will pay $8.5 billion instead of the original $10.3 billion price for the Home Depot wholesale unit.
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The first BW article was aptly titled, Private Equity’s White-Knuckle Deal,” and the other focuses on CD & R’s chairman Joseph L. Rice III, 75, who discusses how his firm years ago fell into the trap of buying into industries it did not understand and “embraced debt too enthusiastically.” (Read article)
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“White-Knuckle Deal” recounts in …
This marine supplies distributor implemented a Warehouse Management System at its single warehouse, significantly cutting shipping errors and improving data collection and sales trend analysis.
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Lorenz & Jones Marine Distributors Inc., Ankeny, IA, believes in its Warehouse Management System so much that it uses it as a tool to bring in new customers.
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The distributor invites prospective customers to the 50,000-square-foot warehouse, places a Radio Frequency terminal in their hands, and lets them pick orders. The demonstration illustrates how easy it is to be directed to the right products.
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Potential customers are sometimes wary because they have had problems with suppliers that regularly shipped the wrong products or the wrong …
