News
Breaking news in Wholesale Distribution
In 2006, Charles Banks retired as CEO of global building materials and plumbing/HVAC distributor Wolseley plc. Banks had nearly 40 years with Wolseley and its subsidiary Ferguson. He decided to apply that vast experience elsewhere at retirement and joined the private equity firm Clayton, Dubilier & Rice, long-time investors in the distribution world. He serves as an operating partner for the firm, meaning his job is to help improve purchased companies to boost value for CD & R.
CD & R is an owner of electrical distributor Rexel and lab supply wholesaler VWR International. Both companies may be sold or up for IPOs in the coming months.
Banks recently sat down with MDM to talk about his transition from leading and building a public company to working for a …
Electrical distributor Graybar rolled out its new IT system in 2003-2004; the three-year implementation was anything but easy for the $5 billion company. But CFO Beatty D’Alessandro, who oversaw the implementation, says distributors can mitigate the risks inherent with such a transition. Here’s how.
Most distributors who are implementing or even considering switching to a new business system may place too much worry on whether the technology will work and what it will cost but not enough on other risks inherent with the transition.
The fact of the matter is if you’re with a name-brand software company, the technology is going to work. This is not splitting the atom or curing cancer -we’re talking about billing material, and shipping material, and …
Value Lessons from HD Supply
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What’s the value of a $12-billion distribution roll-up of a couple dozen companies, roughly doubling in size the past two years, consisting of a highly diversified portfolio of both branch-based and catalog models, in more than half a dozen product categories?
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Rumors are floating $9-11 billion as a potential price. With HDS estimated EBITDA somewhere around $1 billion, that puts the valuation in the range of 9-11X EBITDA. Home Depot paid around 12X EBITDA for Hughes Supply a year ago. But this is definitely a seller’s market. HD may feel some Wall Street pressure to jettison the unit quickly, but it also is in the catbird seat. As reported by the Financial Times and <a ...
Stock Building Supply, Raleigh, NC, has acquired Albuquerque Door, previously owned by Orepac Building Products. Albuquerque Door assembles pre-hung exterior and interior doors, distributes vinyl windows, and manufactures specialty architectural millwork items for national and custom builders in the Albuquerque and Santa Fe markets.
The company operates from one location in Albuquerque; the acquisition adds approximately 50 associates to the Stock family. All senior management, including manager Carolyn Kidd, will remain with the company.
Stock Building Supply now operates 321 locations in 34 states, with reported sales of $5.3 billion for the fiscal year 2006. Stock Building Supply is a subsidiary of Wolseley plc of Theale, England, which had sales in fiscal …
VWR International, Inc., West Chester, PA, a distributor to the global research laboratory industry, announced that Goldman Sachs & Co. and Banc of America Securities LLC have been retained to explore strategic options for VWR.
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VWR is owned by Clayton, Dubilier & Rice, which bought the company from Merck KGaA of Germany for $1.65 billion in April 2004.
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John Ballbach, president and CEO of VWR, said, “As this process moves forward, we remain committed to maintaining our strong relationships with our customers and suppliers and to the continued growth of our business.”
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The company does not expect to disclose further developments regarding the process until the review of strategic options has been completed.
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VWR International …
Graybar, St. Louis, MO, reported sales of $5.009 billion in 2006, up 16.6% from last year. Profit was $57 million, more than double the year before.
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Growth in the electrical market increased 16.6%. Electrical sales were strong in the construction sector. Sales in the comm/data market rose 17% year-over-year.
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In an SEC filing, Graybar attributed the increase in sales to demand in the electrical and communications/data markets. Also, copper-based products, mainly wire and cable, went up in price in the past year, positively impacting sales.
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Profit growth was attributed to double-digit growth in gross margin, coupled with attention to controlling expenses. Graybar also reported productivity gains as a result of the company’s new technology …
January 2007 sales of merchant wholesalers, except manufacturers’ sales branches and offices, were $333.4 billion, down 0.9% from the revised December level but up 6.2% from January 2006.
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January sales of durable goods were virtually unchanged from last month, but were up 5.7% from a year ago. Sales of metals and minerals, except petroleum, were up 4.4% from last month.
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January sales of nondurable goods were down 1.8% from last month, but were up 6.7% from last year.
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Total inventories were $396.7 billion at the end of January, up 0.7% from last month and up 9.2% from a year ago. End-of-month inventories of durable goods increased 1.1% from December and were up 9.3% from last January. Compared to last month, inventories of motor vehicle and …
The Producer Price Index for Finished Goods advanced 1.3 percent in February, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This increase followed a 0.6-percent decline in January and a 0.9-percent rise in December. At the earlier stages of processing, the intermediate goods index turned up 1.1 percent after falling 0.7 percent in the previous month, and prices for crude goods climbed 8.9 percent following a 6.3-percent decrease in January.
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Among finished goods in February, the index for energy goods moved up 3.5 percent compared with a 4.6-percent drop a month earlier. The rate of increase for consumer foods prices accelerated to 1.9 percent in February from 1.1 percent in January. Excluding prices for foods and …
Illinois Tool Works Inc., Glenview, IL, reported revenues increased 15% in the three months ended Feb. 28, 2007. About 2% was from base revenues, 11% from acquisitions, and 2% as a result of translation and other items.
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Organic growth benefited from strong demand from international end markets; however, North American end markets continued to show signs of moderating growth or declines.
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By segment, growth was 5% in engineered products/North America; 20% engineered products/International; specialty systems/North America; 22% specialty systems/International.
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ITW is a $14.1 billion diversified manufacturer of highly engineered components and industrial systems and consumables. The company is in 49 …
ABC Supply, building products distributor based inBeloit, WI , reported record sales of $2.99 billion for fiscal 2006, a 15% increase from 2005, the Home Channel News reported. The company reported profit of $200 million, up 14%.
ABC Supply has more than 350 branches in 45 states andWashington, D.C.
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