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With 2024 shaping up to be another big year in distribution M&A, we spoke with several investment banks on the state of industry dealmaking, what’s driving it, best practices and the outlook for 2025.
The distributor was No. 24 on the list, which looks at sales and earnings growth and other factors for companies below $1 billion in sales.
Mike Marks: Every distributor has weaknesses that could be hogging resources.
Distributors should view their websites as a tool that can make it easier to do business with them.
Electrical segment sales had the highest increase.
USG CEO: Despite “choppy” commercial markets, signs still point to housing recovery.
NuCO2 provides beverage carbonation systems to restaurants and the hospitality industry in the U.S.
Sales for the fourth quarter were up 7.4 percent.
CEO: ‘Pockets of growth’ amid overall slowness in end markets.
Fourth-quarter demand in North America was unchanged from the third quarter.
Profit increased 16 percent to $303 million.
Daily sales rose 6.7 percent.
Fourth-quarter sales were up 32.6 percent.
Partnership enables Accellos to add West Monroe’s FLEXdls labor management software to its offerings.
Manufacturing Revival Radio talks with Dan Meckstroth, MAPI chief economist, about the economic outlook.
Fourth-quarter revenues for the Distribution & Transmission segment were up 126 percent.
The industrial producer price index fell 0.2 percent in both the euro area and the EU27 in December.
Brent Grover recommends getting regular feedback from the front lines and from customers and suppliers.
Food cost inflation was 2.5 percent for the 13-week period.
Manufacturing Revival Radio talks with Nigel Southway, Toronto chapter of the Society of Manufacturing Engineers.
NNT is based in Illinois.
Jackson, MS-based Stuart C. Irby Co., a subsidiary of Sonepar USA, has acquired Burmeister Electric Company, Minneapolis, MN, and High Voltage Testing Laboratories, Fargo, ND.
SKF has acquired the Preventive Maintenance Company Inc., Elk Grove Village, IL. PMCI has 70 employees with annual sales of about $10 million.
PMCI is in Predictive Maintenance services for industrial customers in the pulp and paper, metals, food, automotive and other industries. The PMCI acquisition strengthens SKF in reliability services, condition monitoring products and maintenance strategies.
The integration of PMCI into the SKF Group has just started.
Related Links:
SKF Group Sales Grow 8.3% in First Half
SKF to Buy Austrian Industrial Seals Co.
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Apollo Management, which also recently invested in Rexnord, has made an investment in Bradco Supply Corp., a roofing supply distributor based in Avenel, NJ. Bradco has more than 150 branches in the U.S.
Ferguson has acquired Cal-Steam Supply Inc., a distributor of plumbing products with 10 locations in the San Francisco Bay area. Cal-Steam had sales of $148.6 million in the year ended Dec. 31, 2005.
Ferguson’s parent company, Wolseley, says the acquisition will benefit from its new Stockton, CA, distribution center to be completed later this year.
Ferguson has also acquired Guntersville Fabrication and Sprinkler Co. Inc. and Guntersville Pipe and Supply. Guntersville distributors and fabricates fire protection systems with three locations in the Southeast. It serves Ohio, Florida, Georgia and Louisiana.
Guntersville had sales of $31.5 million in the year ended Oct. 31, 2006.
Related Links:
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Beacon Electric Supply in Southern California implemented a fleet management system to increase the number of deliveries drivers could make in a day. The system has also helped Beacon improve customer service levels and keep salespeople apprised of issues at the delivery site.
Hagemeyer has acquired BREVA, an electrical wholesaler-distributor of MRO products in Belgium. About 70% of BREVA’s sales go to industrial customers.
HD Supply Waterworks, a subsidiary of The Home Depot, has agreed to acquire Sioux Pipe, Inc., a water and sewer distributor with two locations in South Dakota.
Cooper Electric Supply Co., Tinton Falls, NJ, has acquired Fairview Electrical Supply Corp., Fairview, NJ.
Border States, Fargo, ND, has agreed to buy Minnesota Electric Supply Company, a full line provider of electrical products with eight locations in Minnesota and more than 3,000 customers.
Sonepar USA, Philadelphia, PA, has acquired Dallas, TX-based Crawford Electric Supply Company, Ltd. Crawford Electric had sales of $175 million in 2005, according to Electrical Wholesaling’s 2006 top 200 issue.
Air Products, Lehigh Valley, PA, has agreed to acquire the industrial gas business of Central Europe-based BOC Gazy Sp z o.o. from Linde Gas for 370 million euros (US$481 million).  ;
Ellison Technologies, Inc., Cleveland, OH, provider of engineered systems and industrial equipment to metal-working and metal-cutting manufacturers, has acquired Jackson Machinery Company, a privately held distributor based outside of Cleveland.The acquisition provides Ellison a stronger position in northern Ohio, a strong manufacturing base. The area includes major industrial markets such as Cleveland, Akron-Canton, Mansfield, Youngstown and Toledo. Industries represented include aerospace, automotive, agricultural, medical, and energy. Processes used include high-speed and multi-axis machining, robotic automation, continuous flow, and setup reduction. Until being acquired, Jackson Machinery was an exclusive dealer of Mori Seiki products and sub-dealer to Mori Mid-America Sales, …
Airgas, Inc., Radnor, PA, has acquired CFC Refimax, LLC, a full-service refrigerant supplier and reclamation company based in Atlanta, GA.  ; The business, which has about 50 employees, had about $21 million in annual sales in 2006.
Kennametal Inc., Latrobe, PA, has agreed to acquire Federal Signal Corporation’s cutting tool business comprised of Manchester Tool Company, ClappDiCO Corporation and On Time Machine, Inc. for $67 million.
Praxair Distribution, Danbury, CT, a division of Praxair Canada Inc., has acquired the Canadian propane tank-exchange business of Blue Rhino, a Ferrellgas Partners L.P. company.
Under the agreement, Praxair acquired more than 900 propane tank-exchange display cages at retail locations across Canada. In addition, it will take over the contract to supply more than 300 retail gasoline stations belonging to Shell Canada Products with 20-pound propane tanks for their exchange program. In conjunction with this transaction, Praxair also signed a distributor agreement with Superior Tank Incorporated. Superior Tank will serve Praxair’s propane tank-exchange customers in the Atlantic Provinces.
Previously, Praxair provided propane …
New orders for manufactured goods in November, down four consecutive months, decreased $18.7 billion or 4.6% to $384.6 billion, the U.S. Census Bureau reported in the preliminary report on manufacturers’ shipments, inventories and orders. This followed a 6% October decrease.
Excluding transportation, new orders decreased 4.2%. Shipments, also down four consecutive months, decreased $22.1 billion or 5.3% to $393.8 billion. This was the largest percent decrease since the series was first published on a NAICS basis in 1992 and followed a 3.6% October decrease. Unfilled orders, down two consecutive months, decreased $5.3 billion or 0.6% to $815.4 billion. This followed a 0.9% October decrease.
The unfilled orders-to-shipments ratio was 5.82, up from 5.69 in October. …
U.S. construction spending in November 2008 was $1,078.4 billion, 0.6% below the revised October estimate. November is 3.3% below November 2007. Year-to-date, construction spending is $998.4 billion, 5.3% below the same period in 2007, according to the U.S. Census Bureau of the Department of Commerce.
Spending on private construction was at a seasonally adjusted annual rate of $756.4 billion, 1.5% below the revised October estimate. Residential construction was at a seasonally adjusted annual rate of $328.3 billion in November, 4.2% below October. Nonresidential construction was at a seasonally adjusted annual rate of $428.2 billion in November, 0.7% above October.
In November, the estimated seasonally adjusted annual rate of public construction spending …
Creighton University’s Mid-America Business Conditions Index was at a record low of 33.0 for December. The report, found here, is based on a survey of supply managers in the region. An index of 50 is considered growth-neutral.”
The survey showed job losses for the eleventh time in the past 12 months. Inflation has turned to deflation, and export orders have plunged. North Dakota and Oklahoma are the only states in the region where leading economic indicators are above “growth-neutral.”
A Creighton economics professor and the head of the university’s Economic Forecasting Group says that …
Building Materials Holding Corp., San Francisco, CA, a provider of building materials and construction services to professional residential builders and contractors, announced it will close several additional facilities in an effort to continue to align costs with current market conditions.
BMHC will close all of its operations located in Northern Nevada, including Reno and Sparks facilities. Greater Portland, OR, market operations will be consolidated to the Vancouver, WA, facility, closing a site in Sherwood, OR. In Marysville, CA, BMHC will consolidate its lumber and building materials distribution and wall panel manufacturing operations into its existing Modesto, CA facilities. Other operational consolidations will occur in Texas, Colorado and Arizona.
These …
The U.S. manufacturing sector contracted in December for the fifth consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report on Business.
According to ISM, manufacturing activity declined at a rapid rate in December. The decline covers all industries, as none of the industries in the sector reported growth. New orders have contracted for 13 consecutive months, and are at the lowest level on record going back to January 1948.
Order backlogs have fallen to the lowest level since ISM began tracking the Backlog of Orders Index in January 1993. Manufacturers are reducing inventories and shutting down capacity to offset the slower rate of activity.
<a href=http://www.ism.ws/ISMReport/MfgROB.cfm" ...
The U.S. manufacturing sector contracted in December for the fifth consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report on Business.
According to ISM, manufacturing activity declined at a rapid rate in December. The decline covers all industries, as none of the industries in the sector reported growth. New orders have contracted for 13 consecutive months, and are at the lowest level on record going back to January 1948.
Order backlogs have fallen to the lowest level since ISM began tracking the Backlog of Orders Index in January 1993. Manufacturers are reducing inventories and shutting down capacity to offset the slower rate of activity.
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The manufacturing industry in Latin America continued expanding during the first three quarters of 2008, underpinned by strong growth in Brazil and Argentina, but a new report says macroeconomic conditions in the region have deteriorated, and growth expectations for 2009 have dropped sharply. Manufacturing production growth will decelerate appreciably in 2009, according to the Manufacturers Alliance/MAPI Latin America Outlook: 2008-2009, a bi-annual analysis that examines the latest trends and provides a near-term forecast for 16 major industries.
The report focuses on Latin America’s three largest economies-Brazil, Argentina, and Mexico-as these countries are responsible for more than 80% of the …
The desire to go green often is offset by concerns about the upfront cost of the necessary changes. Knoxville Wholesale Furniture, Knoxville, TN, spent $125,000 on three machines to process Styrofoam, plastic and cardboard for recycling, according to a recent article at knoxnews.com.
But the payback expected is more than worth that investment, according to owner Tim Harris. The company is already seeing tangible results from that purchase and other actions taken to green the wholesaler’s primary location: Instead of six loads of trash a day, the company empties one Dumpster of trash into the local landfill each week -slashing waste management costs. With the cost savings realized, Harris expects the investment to pay for itself in one year.
For more details …
The economy has officially shifted into lower gear after a turbulent ride in the second half of 2008. This article is an overview of trends and events in the past year in the wholesale distribution sector.
At the end of 2007, MDM published an article titled, Preparing for Uncertainty in 2008.”At the time, the economy was starting to show signs of weakening. Certain sectors -automotive and housing — had already taken a dive. And deal-making had started to ease.
But we could not have guessed the enormity of change that would take place this year -particularly in the second half. Financial markets collapsed and previously stalwart institutions went under.
Residential construction plummeted further. In November, unemployment rose to 6.7%; half a million jobs …
The collapse of the financial markets, the drops in new residential construction, and the pronouncement that the U.S. is in a recession have all contributed to a general feeling of pessimism about the state of the economy.
The results of the Institute for Supply Management December 2008 Semiannual Economic Forecast show just how widespread that pessimism is.
Business investment, a major driver in the U.S. economy, is expected to decline as both sectors expect a combined 7.6 percent decline in capital spending. Sixty-five percent of survey respondents expect revenues to be the same or smaller in 2009 than in 2008. The panel of purchasing and supply executives expects a 1.1 percent net decrease in overall revenues for 2009, compared to a 2.2 percent decrease …
Optimism is a rare thing in today’s economy. Companies around the world are shuttering plants or cutting production to combat the recession that began in the U.S. and has since spread to other countries and continents. But according to the results of McKinsey Quarterly’s Economic Conditions Snapshot, December 2008, there are a few bright spots out there.
About 27% of companies responding to the survey are considering positive strategic moves, like introducing new products or expanding markets, in the coming months. About 13% are planning to do so without implementing any defensive measures, such as cutting capital spending.
And smaller and private companies appear to be doing better than their large and public counterparts. Executives of 62% of the small or …
Source: U.S. Census Bureau and the Department of Housing and Urban Development
Privately-owned housing starts in November were at a seasonally adjusted annual rate of 625,000. This is 18.9% below the revised October estimate of 771,000 and is 47% below the revised November 2007 rate of 1,179,000. Single-family housing starts in November were at a rate of 441,000; this is 16.9% below the October figure of 531,000. The November rate for units in buildings with five units or more was 166,000.
Building Permits
Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 616,000. This is 15.6% below the revised October rate of 730,000 and is 48.1% below the revised November 2007 estimate of …
According to a report released today by RSM McGladrey, executives of U.S. wholesale-distributors have altered their growth and operational strategies to offset sector weaknesses and the rising costs of doing business, mainly associated with labor and energy.
RSM McGladrey’s Distribution Industry Report was extracted from the results of the firm’s 2008 Manufacturing and Wholesale Distribution National Survey conducted earlier this year. More than 960 industry executives, including 303 Distribution executives from 284 companies responded to the survey.
According to the survey, business conditions for many distribution companies have declined. Thirty-eight percent of those surveyed described their companies as thriving and growing,”a decline of 21% from RSM …
We asked in the MDM Reader Survey recently what special topics you wanted to see covered by MDM in the next year. Here are some of those answers, with in some cases, links to recent premium content articles on the topic:
BNET (www.bnet.com) says one way that companies can boost employee morale in a time of budget cuts and layoff fears, is to sacrifice executive pay to send a message down the ladder that “we’re all in it together.”
The article cites $37.5B foodservice distributor Sysco Corp.’s experience. Apparently the distributor’s top 15 executives announced last summer they would voluntarily take a 5% pay cut. The rest of the executives got a pay freeze for the next year. Everyone else got a 3% pay increase -that is 50,000 employees.
A Sysco spokesman is quoted in the article as saying:
“We wanted to show our people that it was a tough economic time, but that the corporate office was going to take the first hit.”
And …
Mercer Consulting reported results of its recent Snapshot Survey, where more than 1,000 organizations in the first two weeks of November told about the challenges they face as a result of the current economic turmoil.
Despite all the bad news, according to Mercer, most appear to be “refraining from taking drastic actions.”Here are a few benchmarks:
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Canada may follow the U.S. into a recession, according to an economist interviewed for a recent article in MDM, Forecast: Canada Faces a Rough First Half.”Demand for Canada’s products in the U.S. continues to fall despite a weakening of the Canadian dollar. About a third of Canada’s GDP is based on exports to the U.S.
What’s more, commodity prices and demand for raw materials have softened, putting a damper on the historically strong resources sector. And though Canada’s banking system has not seen the same turmoil as in the U.S., more businesses are reporting tighter credit conditions in the final quarter of the year.
Read the full story on Canada’s economy.
Motion Industries …
Source: Statistics Canada
The Canada/U.S. exchange rate, as well as a notable decrease in the price of petroleum and coal products, both affected October’s manufacturing results. The change in the exchange rate had a strengthening effect for manufacturers who determine their prices in U.S. dollars. On the other hand, the price of petroleum and coal products dropped 13.5% in October, reducing the value of sales in that industry.
In constant dollars, manufacturing sales decreased 1.8% compared with September, bringing constant dollar sales to their lowest level since December 2001.
In October, 8 of 21 manufacturing industries, accounting for about 40% of total sales, posted decreases.
By Sector
Petroleum and coal …
Industrial production decreased 0.6 percent in November with declines widespread across industries. The drop in output in September was revised down, and the rebound in October was revised up, in large part because both the decrease due to the September hurricanes and the subsequent partial recovery in October were larger than previously reported.
Manufacturing production dropped 1.4 percent in November despite the resumption of activity in the commercial aircraft industry after the resolution of a strike early in the month. The output of mines advanced 2.5 percent, primarily as a result of a further post-hurricane recovery in crude oil and natural gas operations in the Gulf of Mexico. Taken together, the rebounds after the strike and the hurricanes added almost 1 percentage …
The Producer Price Index for Finished Goods fell 2.2 percent in November, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This decline followed decreases of 2.8 percent in October and 0.4 percent in September. At the earlier stages of processing, prices received by manufacturers of intermediate goods dropped 4.3 percent in November after falling 3.9 percent in the prior month, and the crude goods index declined 12.5 percent subsequent to an 18.6-percent decrease in October.
Among prices for finished goods, the index for energy goods fell 11.2 percent in November following a 12.8-percent drop in the preceding month. Prices for consumer foods were unchanged after declining 0.2 percent in October. By contrast, partially counteracting …
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