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ECONOMIC OUTLOOK REPORTS

MDM’s 4Q Economic Snapshot Webcast

It provides a thorough look at the state of the U.S. wholesale distribution economy today and what factors are influencing underlying demand.

2024 Annual MDM Economic Outlook

Our 2024 EOR is a comprehensive economic reference guide to the U.S. wholesale distribution industry and its many different verticals. It is comprised of 20 different subreports.
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MDM September 2024 Premium Monthly

This issue includes seven articles that span Stellar Industrial’s buy-and-build technology approach; what to know before expanding across state lines; corporate DEI pushback; Ferguson’s digital strategy; and more.
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Market Insight Reports

MDM 3Q 2024 MarketPulse Report

Find a wealth of data and analysis extracted from the 3Q24 Baird-MDM Industrial Distribution Survey, including trending charts and figures for revenue and expectations, plus plenty of interesting commentary.

MDM 3Q 2024 M&A Report

See our top Premium M&A articles from July-September 2024, including QXO’s rollout plans; Sonepar’s Purchase of Summit Electric; What to know before expanding across state lines; and the latest EBITDA trading multiples.
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Case Studies

MDM Case Study: Ferguson

This case study explores the plumbing, HVACR, PVF and industrial supplies distributor’s past decade of growth through diversification, private branding and increased customer loyalty.
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Premium Events
Premium Articles
Technology
NetSuite Takes Steps Toward IPO
NetSuite Inc., San Mateo, CA, an on-demand business-management software provider focused on small- and medium-sized companies, is moving closer to its initial public offering.
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According to various news reports, the company expects the IPO to total 6.2 million shares of common stock priced between $13 and $16 each. Based on this, NetSuite's market capitalization would be between $773.6 million and $952.2 million, according to the AP. The company expects to raise net proceeds of nearly $90 million from the IPO.
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The proceeds will be used to pay a balance on the company's secured line of credit, but also may be used to make acquisitions.
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NetSuite's controlling shareholder is Take Ventures LLC, ...
Finance
Legrand Buys Chinese Manufacturer
Electrical manufacturer Legrand, based in France, is buying TCL Wuxi, a Chinese manufacturer specialized in modular and high-current circuit-breakers.
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The move reinforces Legrand's presence in China. Legrand is already active in the energy-distribution segment in China.
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TCL Wuxi, which reports sales of close to & euro; 20 million (US$29.3 million at current rates of exchange) has a sales force of 200. &nbsp ;
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TCL Wuxi is Legrand's fifth acquisition since January 2007, following HPM, number two for wiring devices in Australia; UStec, a US company specializing in residential structured cabling; Kontaktor, number one for high-current circuit-breakers in Russia; and, most recently, Macse, Mexico's number one producer of metal cable management ...
Economic Trends
Cutting Jobs – A Painful Exercise, So Do It Right
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. ...
Finance
Transport/Logistics M& A Deals On Pace to Beat 2006
Total transportation and logistics deal volume for 2007 is on pace to exceed 2006 levels, according to Intersections, PricewaterhouseCoopers' quarterly report on M & A in the global transportation and logistics industry. This may be due in part to the effects of the decline in debt market liquidity and stock market volatility felt by financial investors.

Total deal value during the first three quarters of 2007 exceeded the total deal value announced during the comparable period in 2006 ($39 billion versus $27 billion, respectively).

The pace of M & A activity in the transportation and logistics industry has not abated, and we anticipate that it is going to continue as a result of the current global environment," said Ken Evans, U.S. transportation and logistics ...
Finance
Airgas Makes Three Acquisitions
Airgas, Inc., Radnor, PA, has acquired Wright Welding Supply, Inc., an industrial gas and welding supply distributor in Des Moines, IA, and two other distributors in Texas and British Columbia. Together, the three transactions add $22 million in acquired annual sales.
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Wright Welding Supply, Inc. operates in Iowa and eastern Nebraska from five locations in Des Moines, Fort Dodge, Oskaloosa, and Council Bluffs, IA; and Omaha, NE, with an industrial and specialty gas fill plant in Des Moines. The operations, with about 40 employees, have been integrated into Airgas North Central, one of the regional companies within Airgas.
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In Texas, Airgas has acquired Basin Welding Supply in Odessa, TX. Basin's new fill plant in Odessa, which opened in February 2007, will ...
Finance
Lincoln Electric Acquires Vernon Tool Co.
Lincoln Electric, Cleveland, OH, has acquired Vernon Tool Company Inc., a San Diego, CA-based manufacturer of computer-controlled pipe cutting equipment used for precision fabrication.

Vernon Tool's annual sales are about $9 million. Its customer base is in industrial construction as well as infrastructure and energy-related segments.

Lincoln Electric is a manufacturer of arc welding products, robotic arc-welding systems, plasma and oxyfuel cutting equipment and has a leading global position in the brazing and soldering alloys market. It has 36 manufacturing locations and operations in 19 countries with distributors and sales offices in more than 160 ...
Finance
Cooper Industries Buys S. Korean Supplier
Cooper Industries, Ltd., Houston, TX, has acquired Hyundai Explosion-Proof Electric Company, a South Korea-based manufacturer of explosion-proof electrical equipment.
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HEPEC specializes in explosion-proof Glass Reinforced Plastic lighting, control panels and switchgear and its products are complementary to the current Cooper Crouse-Hinds product offerings.
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The acquisition provides Cooper with increased access to the South Korean market, with its strong shipbuilding industry and where significant investment to upgrade domestic energy and petrochemical infrastructure is underway.
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The HEPEC acquisition is the eighth deal announced by Cooper in 2007.

Cooper Industries is a global manufacturer with 2006 revenues of $5.2 billion, about 85% ...
Finance
Parker Hannifin Buys Temp. Sensing Eqmt Supplier
Parker Hannifin, Cleveland, OH, motion and control technologies supplier, today announced has acquired the Texas Thermowell Industries, Beaumont, TX, business of Bravura, Ltd., a manufacturer of temperature sensing protection equipment.&nbsp ;
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The anticipated annual revenue of the business for the 2007 fiscal year will be $5 million.
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Texas Thermowell products will give Parker a solid foundation in critical temperature sensing applications within chemical processing and petroleum refining markets," said John Greco, president of Parker's Instrumentation Group. "Temperature sensing is among the most commonly required control applications in processing plants which may have dozens of temperature monitoring points using these devices to protect ...
Finance
Report: HD Supply to Sell LBM Assets
The Home Channel News is reporting that HD Supply has agreed to sell its Lumber and Building Materials unit to Pro-Build Holdings Inc. The unit includes 19 lumberyards in the Atlanta area and 20 in Florida.

The assets are part of Williams Bros. Lumber and Cox Lumber, which HD Supply bought in 2005 and 2006, respectively. At the time of acquisition, Atlanta-based Williams Bros. had sales of $400 million, and the Florida-based Cox had sales of $396 million. The unit also includes Forest Products Supply in Sarasota, FL.

HD Supply was split off Home Depot in August and sold to a trio of private equity firms for $8.5 billion. This is the first news of a change in HD Supply's makeup since the ...
Free
Suncoast Files for Ch. 11 Bankruptcy Protection

Suncoast Roofers Supply Inc., Tampa, FL, has filed for Ch. 11 bankruptcy protection. In its bankruptcy filings, the roofing supplies distributor reported a 57% decline in sales over 2006 due to the decline in housing and related markets.
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For the nine months ended Sept. 30, 2007, sales were about $100 million. By comparison, sales for the distributor during fiscal 2006 were $209.6 million.
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At the same time the distributor was hit with the housing slump, it embarked on an ambitious expansion campaign to vertically integrate" its manufacturing and distributing processes to improve product availability and delivery, and "capture a larger share of supply chain profits."
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In 2006, Suncoast acquired 80% of American Concrete Tile Inc., a ...
Finance
Redwood Plastics Acquires Canadian Supplier
Industrial rubber and elastomer product supplier Redwood Plastics Corp., a division of The Redco Group, has acquired BC Rubber Supply Ltd., Langley, BC.

Redwood Plastics has seven branches and two manufacturing facilities in the U.S. and in Canada. Redwood Plastics is also a partner of Prisma Plastics International Inc. with Warehoused Plastics Inc. and Plastics Alto/Polyfab ...
Finance
Philips to Buy Genlyte for $2.7B
Philips Holding USA Inc., a subsidiary of Royal Philips Electronics, has agreed to acquire Genlyte Group Inc., a manufacturer of lighting fixtures, controls, and related products for the commercial, industrial and residential markets, for $2.7 billion in cash.


The acquisition allows Philips to expand in the green-lighting business in North America and to introduce Genlyte's products to the international market. About 90% of Genly'tes 2006 revenues were in commercial and industrial applications in 2006. The rest are focused on high-end residential applications.


Genlyte sells to distributors and electrical wholesalers. The company's products are also promoted through architects, engineers, contractors, and building owners.

Besides growing our ...
Finance
MDM Interview: New Firm Invests in Distribution
Sensing a need for outside investors with a firm grasp of distribution businesses, a group of industry veterans, as well as consultants Adam Fein and Brent Grover,&nbsp ; has formed the first private equity firm that will invest exclusively in distribution companies. The goal is to use the principals'and investors'experience, expertise and networks in the industry to help management maximize the growth and profitability of portfolio companies, says Jim Miller, a principal in the firm.


MDM: Where did you come up with the concept for Supply Chain Equity Partners?
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Jim Miller: The idea actually came from the distribution industry itself. Supply Chain Equity was created to fill a void in the distribution sector that was expressed by ...
Finance
Hagemeyer Accepts Buyout Terms
Electrical distributors Rexel and Hagemeyer have reached an agreement on Rexel's all-cash offer of & euro; 4.85 for Hagemeyer's assets, valuing the company at & euro; 3.1 billion (US$4.5 billion).


The offer was approved by the boards of Rexel, Sonepar and Hagemeyer. Rexel has secured committed debt financing for the all-cash offer.

As previously announced, Rexel has agreed to sell Hagemeyer's North American, Asian-Pacific and selected European businesses to Sonepar after completion of the sale.

The overall transaction will combine the strengths of three major players in the distribution of electrical supplies. The transaction will broaden Rexel's footprint across Europe, while significantly consolidating Sonepar's position in North America and ...
Free
United Rentals Sues Cerberus Capital
United Rentals Inc., Greenwich, CT, has filed a lawsuit against Cerberus Capital Management's RAM Holdings Inc. and RAM Acquisition Corp. Cerberus had agreed to acquire United Rentals, but recently Cerberus has second-guessed its decision to do so.
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The lawsuit wants to force the agreed-upon acquisition, saying Cerberus has violated the merger agreement and should not be able to avoid the agreed-upon transaction by paying a break-up fee. The lawsuit contends that Cerberus has the financing necessary to complete the transaction.
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United Rentals is an equipment rental company with a network of more than 690 rental locations in 48 states, 10 Canadian provinces and one location in Mexico. The company offers for rent over 20,000 classes of rental equipment with a ...
Finance
ThyseenKrupp Services to Buy Apollo Metals Group
Duesseldorf, Germany-based ThyssenKrupp Services AG is expanding its aerospace materials services business by acquiring UK-based company Apollo Metals Group, which includes Aviation Metals for an undisclosed fee from Murray International Holdings, UK.
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Apollo provides high-grade products such as aluminium, stainless steel and non ferrous metals with value-adding processing services for aerospace manufacturers.

The acquisition will combine Apollo's largely European and Far Eastern businesses with ThyssenKrupp Services' largely U.S.-based operations to form a global enterprise with 30 locations in 13 countries and a turnover of more than $700 million.

Currently, ThyssenKrupp Services is servicing the aerospace industry with its subsidiaries in Brazil, ...
Free
Court Dismisses Hoboken’s Ch. 7 Bankruptcy Petition
The Ch. 7 bankruptcy petition recently filed by Hoboken Wood Flooring has been dismissed by the U.S. Bankruptcy Court for the District of Delaware.
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The dismissal places Hoboken back where it was before filing a petition for Ch. 7 bankruptcy, and potentially opens the floodgates for litigation by creditors against Hoboken and its subsidiaries, as well as its controlling investor, private equity firm Code Hennessy and Simmons.
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The trustee in the case filed a Motion to Dismiss Nov. 15, and the case was dismissed Nov. 16. John D. McLaughlin Jr., special counsel to Young Conaway Stargatt & Taylor LLP, law firm based in Wilmington, DE, filed the Motion to Dismiss for the trustee. He said this particular case of dismissal was rare, due to the size and complexity of ...
Finance
Cerberus-United Rentals Deal May Not Go Through
Private equity firm Cerberus Capital Management, L.P. has informed United Rentals Inc., Greenwich, CT, that it is not prepared to proceed with the purchase of the construction equipment rental outfit on the terms of its July merger agreement.
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The agreement provides for a limit of $100 million liability if the merger does not go through.
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United Rentals, in a press release, said the repudiation is unwarranted and incompatible with the covenants of the merger agreement. Having fulfilled all the closing conditions under the merger agreement, United Rentals is prepared to complete the transaction promptly."
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United Rentals has retained a law firm to represent it in the matter.
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United Rentals, Inc. is an equipment rental company with ...
Finance
3M Expands Its PPE Line With Purchase of Aearo
Diversified manufacturer 3M, St. Paul, MN, has agreed to acquire Aearo Technologies Inc., Indianapolis, IN,&nbsp ; for $1.2 billion. Aearo is a supplier in the personal protection industry and manufactures and markets personal protection and energy absorbing products.
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Aearo is owned by funds advised by Permira, a global private equity firm, and company management.
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Aearo will significantly expand 3M's occupational health and environmental safety platform by adding hearing protection as well as eyewear and fall protection product lines to 3M's existing full-line of respiratory products.
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Aearo complements and significantly broadens our core safety and personal protection business, a space which is growing fast and of strategic importance to the ...
Finance
Trelleborg Acquires Penn. Seals Distributor
The Trelleborg Group, through the Trelleborg Sealing Solutions business area, has acquired the privately owned seal distributor Sealing Solutions Inc., Colmar, PA, which has about 40 employees and annual sales of SEK 100 M (US$15.8M based on current exchange rates).


Sealing Solutions is a distributor of Trelleborg's and other suppliers'sealing products, primarily to the aerospace industry and industrial OEM companies.
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Sealing Solutions is a well-managed, profitable and growing player that, in combination with our earlier acquisitions this year, will further strengthen our distribution in North America. This acquisition will give us valuable new customer contacts among, for instance, aerospace systems manufacturers, jet engine manufacturers and industrial ...
Economic Trends
Industrial Production Up 0.5% in July
Industrial production increased 0.5% in July. Aside from a hurricane-related rebound in October 2008, the gain in July marked the first monthly increase since December 2007.
Manufacturing output advanced 1.0% in July, primarily due to a jump in motor vehicle assemblies from an annual rate of 4.1 million units in June to 5.9 million units in July. Excluding motor vehicles and parts, manufacturing production edged up 0.2%.
The output of utilities fell 2.4%, reflecting unseasonably mild temperatures in July, and the output of mines increased 0.8%. At 96.0% of its 2002 average, total industrial production was 13.1% below its level of a year earlier.
In July, the capacity utilization rate for total industry edged up to 68.5%, a level 12.4%age points below its 1972-2008 ...
Economic Trends
Manufacturing Accounts for 31% of Mass Layoffs in 2Q

Mass layoff events reached a record high during the second quarter of 2009 with the manufacturing sector accounting for 31% of the separations, according to preliminary figures released by the U.S. Department of Labor's Bureau of Labor Statistics. Employers initiated 2,994 mass layoff events in the second quarter of 2009 resulting in the separation of 534,881 workers from their jobs for at least 31 days.

Second quarter program highs in the number of separations were recorded in 7 of 18 major industry sectors, all four geographic regions, and fourteen states. Thirty-eight percent of employers reporting an extended layoff in the second quarter of 2009 indicated they anticipated some type of recall, down from 51% a year earlier, and was the lowest proportion of anticipated recalls for a ...

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Free
Could Destocking Be Near An End?

While most people say that initial rounds of inventory reduction were probably a good thing, bringing on-hand inventories more inline with demand, the question always was how far will it go and for how long.

Recent reports - including the results of the Baird Industrial Distribution Survey - say destocking may be coming to an end in the last half of this year. While that may have some positive implications for sales, the end of destocking likely will not be the magic bullet to ramping up stalled factories soon.

Why? According to the Baird Survey, in the second quarter: "Inventory levels continue to decline with no restock expected in the near-term. Nearly 7 out of 10 ...

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