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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.
Profit for the quarter grew 83% to $63.5 million.
How much time does your sales team spend in unproductive waters?
Latest Baird survey finds aggregate revenue growth up 3.2%, a deceleration of 90 basis points compared to last quarter. Despite the softening, industry leaders remain positive about the economy and expect a relatively normal second half of the year.
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US LBM division expands with third roofing and siding focused location.
There are fishermen, and then there are catchers of fish.Some anglers are more successful than others, and it isnt about who has the best technology.How much time does your sales team spend in unproductive waters?
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This report is researched and produced by MDM editors. View the First Quarter report here.
These product groups provide a snapshot of inflation trends based on the Producer Price Index from the U.S. Bureau of Labor Statistics. Second quarter 2019 pricing levels are compared with first quarter 2019 and second quarter 2018.
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Industrial
Construction
Electrical
Other Related Electrical
Power Transmission/Bearing
Fluid Power
Plastics
Fasteners
Hardware
Tools
Gases/Welding
Paper
HVACR/Plumbing
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In this two-page report, available to download in PDF after log-in, we feature data on merger and acquisition trends and financial metrics for the largest publicly traded distributors across diverse sectors in the second quarter of 2019.
In partnership with Houlihan Lokey, an investment banking firm, the report includes data on M&A activity trends across all industries (not just distribution), as well as valuation multiples for deals in all industries.
Modern Distribution Management's monthly Industrial Inflation Index measures a cross-section of industrial supplies.
This index includes:
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Wholesale revenues, inventories and ratios from May 2019.
MDM’s top news briefs from News briefs from July 11 – July 25, 2019.
For the first six months sales fell 3.8% to $16 million.
Primary author and economist Brian Lewandowski of CU-Boulder shares how an enhanced outlook in this 14th edition of EBWD will allow distributors to better forecast growth potential for 19 business sectors.
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If firms ignore the profit opportunities in the existing business, they are severely limiting their ability to take part in the new distribution future. No one can hit you over the head with common sense in such a nice way as distribution profitability expert Dr. Al Bates. In his article in this issue, he stresses that management needs to do a better job getting the team aligned around the existing opportunities to improve profitability basic blocking and tackling.
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A distributors existing business is a massive profit improvement opportunity that is waiting to be optimized through better management practices in operational improvement and consensus.
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This is the third of three articles in our series on succession planning. This article focuses on the decision to sell to an external buyer, such as a private equity firm or a competitor, and what to consider from a financial and non-financial point of view when deciding which is the best path for your business. This series of articles is not intended to be comprehensive of all of the issues associated with exiting a distribution business.
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Sales were up 6.6% in the first nine months.
PartsPoint is a distributor of automotive aftermarket parts and accessories in the Netherlands.
MDM’s top news briefs from News briefs from June 26 – July 10, 2019.
The MDM Market Snapshot, based on data from MDM Analytics, includes market demand for Motor and Drive Controls in the U.S., plus the top end users by 6-digit NAICS.
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As top distributors become more proficient with data analysis, others are falling behind, creating a critical gap in competitive business intelligence. Four of the speakers at MDM’s upcoming Analytics Summit share their recommendations here for optimizing data analytics across a range of business operations.
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To successfully integrate its company and grab market share, Interline Brands has had to pay close attention to and respond to the needs of acquired and current customers, Interline Brands President William Sanford said recently at the JPMorgan Basics & Industrials Conference.
In fact, learning about customers starts before an acquisition is even made, he said. The relationships we acquire are important. We have to understand how strong those relationships are before we make an investment," Sanford said.
The $1 billion distributor of facilities maintenance products was formed through a series of mergers of more than 20 companies in the plumbing supply and facilities maintenance industries.
Last year it bought American Sanitary Inc., a rollup and national …
The Timken Company, Canton, OH, has increased prices on double and triple thermal treated product, effective with shipments from Jan. 1, 2008. Bar product prices will increase by $50 a ton, and tubing product prices will go up by 10%.
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Prices on as-rolled and single thermal treated products are not affected.
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Timken is a $5 billion manufacturer operating in 26 countries and 25,000 …
At the May Industrial Supply Association annual meeting in Las Vegas, industry consultant William McCleave presented the results of a survey of ISA members, The Future Impact of Size and Value Content on Industrial Distribution.” This article outlines one of the key findings of that report: the importance of value-add in distribution.
How is value-add being defined in distribution today? As noted in these pages before, the term has been used so heavily that it risks losing meaning. At the same time, most wholesale distribution executives agree that market battles ahead will center on how well their companies define and sell value.
In a recent survey of Industrial Supply Association members by consultant William McCleave, most respondents felt that value-add …
Applied Industrial Technologies, Cleveland, OH, distributor of bearings and related products, has combined its Applied Maintenance America and Fluid Power Connection catalogs, as well as added more than 10,000 new and expanded products. The catalog will be available in July 2007 and can be reserved online at www.applied.com/catalogrequest.
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Applied said it combined the two catalogs in response to requests from customers to provide a one-stop source for the MRO parts that Applied supplies. The 07/08 Applied Industrial Technologies Product Catalog offers nearly 40,000 parts from more than 100 suppliers, including 20,000 bearings and power transmission parts and almost 9,000 fluid power products.
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The new Applied catalog includes comprehensive product lines …
As customer bases shift, competition intensifies and commodity prices seesaw, it's more crucial than ever for distributors to maximize profitability by magnifying the value they provide for their customers and not competing on price alone. Increasing prices by 1 percent without hurting volume can improve profits as much as 11 percent, according to one pricing consultant.
Distributors looking to boost profitability and refocus on value should analyze and redesign their pricing strategy.
"If a sales force is out negotiating deals, there's very little control. They come back and say, 'I've got a deal at $90. I know our price is $100, but if we don't give them $90 we won't get the deal.' And everyone feels as if they are being held for ransom, says …
Channel dynamics, as our lead article explores, have arguably never been more complex or more fluid. One of the core concepts as this article came together was the need to have a clear line of visibility from manufacturer to end-user customer. With so many variables at play, visibility seems to be one of the few constants.
Channel conflict appears when clarity disappears, whether in communication, policies, discount structures or behaviors. There is no right answer, yet there are great examples of consistent and clear approaches that are working.
Ten years ago, the hot issue was how integrated supply was radically altering traditional channel relationships. Power was shifting to the customer. The redundancies and inefficiencies of traditional channels were ripe for …
The Home Depot, Atlanta, GA, has launched its Eco Options program in the U.S. Eco Options is a classification that allows customers to easily identify products that have less of an impact on the environment.
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The Home Depot has identified more than 2,500 Eco Options products, including all-natural insect repellents, cellulose insulation, front-load washing machines, organic plant food and vegetables in biodegradable pots. The array of Eco Options also includes compact fluorescent light bulbs, programmable thermostats and certified wood.
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Products with the Eco Options label are either eco friendly by definition, such as solar lights that use natural power, or have met certain environmental performance criteria verified by Scientific Certification Systems, an …
Our cover story this week in Modern Distribution Management on channel management has been a fascinating subject to research. There are some significant role shifts taking place. We gained a lot of input from innovators in manufacturing and distribution, including many more beyond those quoted in article.
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It was also a difficult topic to get beyond the generalizations, stereotypes and misperceptions that in fact too often form the basis for relationships and ultimately policies in many companies. For some people, channel management is an oxymoron, because they are using the same pricing and marketing formulas in place 10 or 20 years ago. But we found others who are finding some good …
Channel management is a slippery subject. The most jaded observers might argue the term has largely become an oxymoron, as stories of mismanagement and dysfunctional practices seem like commodities.
But as the lead article in this issue outlines, distributors and manufacturers are finding ways to leverage the current shifts in markets to focus and define their value. Channel participants are grappling with many complex issues -converging channels, private label brands, new product programs, new discount models.
The key emphasis today is active management. One size can’t fit all. Those who gain some understanding of how customers are shifting in their sourcing needs and problems, and then build programs and policies to meet those needs, find a competitive differentiator …
New rules regarding labeling and hazard communications for chemicals will go into effect over the next year, but many questions remain on what the rules mean for distributors. This article examines the new requirements and provides tips for ensuring compliance.
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Outlook has a mixed message: Full speed ahead, but watch your back.
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Recruiting new talent into the manufacturing industry isnt a new challenge, but a new study from ThomasNet highlights that part of the challenge is internal: Companies arent recruiting millennials as actively as they think they are and they have misconceptions that prevent them from doing so. This article examines what that means for manufacturing.
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Ferguson expands product inventory with acquisition.
Customer service ranks second to price in importance.
B2B websites must provide similar service, ease of navigation as sites like Amazon, Target.
Sonepar’s acquisition of Industrial Distribution Group is, in many ways, an end mark on a 20-year timeline of industry trends, challenges and shifts, all rolled into one deal. Where shall we begin? The best place is back to the future.
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A distributor that doesn’t provide training opportunities for its work force will get left behind in today’s competitive market. But training resources abound for wholesale distributors, including online, on-demand courses, giving companies of any size the chance to continuously educate their employees.
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Purchase helps company expand presence in life science industry.
Company purchases Quebec-based Oxygne Pro-Tech Inc. and Mtalox (2000) Inc.
Popular resources include The Learning Center, University of Innovative Distribution.
Company seeks $1 billion for buildings material distributor, according to Reuters.
Joel Hansen replaced interim president and CEO.
Organization names Paul Molitor as president and CEO.
Pacific Star Foodservice serves customers in Mexico City, Guadalajara, Monterrey and Tijuana.
The combined company will continue to operate as two divisions.
Using data can show how your organization can start leveraging data about your customers and prospects more effectively to build competitive advantage. Whoever has the best visibility into where opportunity exists in the marketplace can best focus on how to monetize it.
Speculation over increased merger and acquisition activity has created a lot of buzz among distributors, and some sectors have seen increased activity.
If your customers aren’t asking you for more of something – whether it’s products or services – you are in a distinct minority. In the latest MDM/Baird Distribution Survey, nearly 90 percent of respondents are figuring out how to meet new customer demands. Should you invest in technology or people? Or both? Where do you cut to free up resources to meet the new expectations? Because ultimately it comes down to that question of resources.
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Corporate customers now seek an online experience similar to the business-to-consumer model, and distributors must adapt their e-commerce approach accordingly if they hope to increase conversion rates and customer retention. Michael Nagrant, principal consultant, Codifyd Inc., details why this is important and how it can be achieved in the recent MDM Webcast, 7 Key Investments Distributors Should Make to Grow Online Revenue. This article is an exclusive summary of the webcast, which is available on-demand and on DVD at mdm.com/7Investments.
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Distributors can expect more expensive warehouse space on top of increased HR costs.
Distributor Index decreased to 60.4 and Manufacturer Index increased to 59.1.
Distributors lag when it comes to follow-up or reinforcement training, and they woefully lack in negotiation training, even though a major part of a buyer’s role is negotiating with vendors. This article, based on the results of a recent Real Results Marketing survey, further examines the challenges distributors face around providing training.
This article is part three in our ongoing series on training in distribution. Part one looked at how distributors can shift their thinking about training, and part two examined the challenges distributors face around providing training
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The MDM Market Snapshot, based on data from MDM Analytics, includes market demand for Tool Storage (portable tool boxes and drawer chests) by end user in the U.S., plus the top end users by 6-digit NAICS.
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With M&A poised for a strong finish this year, distributors on either side of a deal should strategically prepare now for the opportunities that will arise. Buyers must carefully examine how a targeted asset fits, and sellers must ensure maximum value before entertaining offers.
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Distributors must evolve to keep customers and differentiate from competitors.
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This article is part of MDM's 2016 Distribution Trends Special Issue.
For the next generation workforce, pay is still important, but the benefits that come with a position from health insurance to career development programs are just as important, if not more so. As a result of that and new or changing regulations, the cost of employment keeps rising.
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This article is part of MDM's 2016 Distribution Trends Special Issue.
While increased costs related to employment may seem inevitable, you can take steps to mitigate the impact to your company’s bottom line. Here are five tips from Nancye Combs, president and CEO of HR Enterprise, a human resources consulting firm in Louisville, KY, on how to manage the rising cost of employment.
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This article is part of MDM's 2016 Distribution Trends Special Issue.
Companies that dont have the right technology in place or dont optimize their current capabilities are leaving dollars on the table. But a renewed focus on getting the most out of existing systems can yield numerous benefits.
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This article is part of MDM's 2016 Distribution Trends Special Issue.
The proliferation of mobility and growth in the use of sensors is driving connectivity in the consumer and business worlds. Distributors have increasingly embraced the role of mobile in purchasing, leading to more focus on creating mobile-friendly websites. But the practical role of these devices also continues to grow.
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This article is part of MDM's 2016 Distribution Trends Special Issue.
Although marketing has grown in importance for distributors over the last year, most dont realize the crucial role it plays in gaining a competitive advantage.
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This article is part of MDM's 2016 Distribution Trends Special Issue.
MDM identified a handful of other distribution trends to watch for the rest of 2016 and into next year. Look for stories on these and other topics relevant to the industry in future issues of MDM Premium and at mdm.com.
Other trends include:
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This article is part of MDM's 2016 Distribution Trends Special Issue.
Bensenville, IL-based health care packaging distributor Action Health was selected as a 2016 MDM Market Mover for its innovative approach for adapting to the new low-margin reality of its market.
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Chicago, IL-based electrical and decorative lighting distributor Paramont EO recently reconfigured its warehouse to accommodate more products more efficiently. The company was selected as an MDM Market Mover for how it turned an operational efficiency exercise into a company-wide team-building strategy.
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This article is part of MDM's 2016 Distribution Trends Special Issue.
Formed in 2008 at the height of the Great Recession, roofing distributor SRS Distribution Inc., McKinney, TX, reached $1 billion in revenue within six years. Last year SRS grew revenue 32 percent and in the past three years it has seen sales, EBITDA and locations double. Associate Editor Eric Smith spoke with Dan Tinker, president and COO, about the companys origins, its ability to grow organically and through acquisition no matter the economic conditions and its commitment to a strong culture.
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Celebrating its 60th anniversary this year, Winsupply, Dayton, OH, is fresh off a name change (it was formerly WinWholesale) and poised to set another record for revenue. Associate Editor Eric Smith spoke with President and CFO Roland Gordon and CMO Steve Edwards about the companys past, present and future.
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Modern Distribution Management's monthly Industrial Inflation Index measures a cross-section of industrial supplies.
This index includes:
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Distributors must invest strategically in talent and technology to differentiate.
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The sector snapshots are part of MDM’s 2016 Distribution Trends Special Issue. The sector snapshots provide a quick look at key trends affecting each of the 15 distribution sectors included in MDM’s Market Leaders lists.
Snapshots are provided for the following sectors: Industrial, Electrical, Power Transmission/Bearings, HVACR/Plumbing, Building Materials/Construction, Electronics, Fasteners, Fluid Power, Gases/Welding Equipment, Hose/Accessories, Industrial PVF, Jan-San, Pharmaceuticals, Plastics and Safety.
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This article is part of MDM's 2016 Distribution Trends Special Issue.
With the forgettable first half of 2016 now behind them, distributors hope to bid farewell to a tepid sales climate that has stunted industry growth since late last year.
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