MDM BLOG: INDUSTRIAL MANUFACTURERS IN U.S. PLAN TO GROW INTERNATIONAL SALES
MDM Editor Lindsay Young writes about PricewaterhouseCoopers' second-quarter survey of industrial manufacturers, who report they plan to increase revenues from international sales to 35% of the total. What are you doing in response to this shift?More...

BAIRD: M&A ON PACE TO SHATTER RECORDS
U.S. M&A activity is on pace to shatter previous records, according to the mid-year update on mergers from Robert W. Baird & Co. The total value of M&A worldwide increased 55.7% in the first half and the number of transactions was up 6%. Ten of the 12 broad industry categories showed increases, with the industrial sector seeing the largest jump in number of deals – at 10.7%. Read the full report here More...

A NEW GROWTH STRATEGY FOR PVF DISTRIBUTOR MCJUNKIN
The traditionally conservative McJunkin Corp. recently announced it would merge with Red Man Pipe and Supply. The agreement makes sense from a strategic standpoint, according to this feature in The Charleston Gazette, paper for the hometown of McJunkin. Red Man specializes in the "upstream" pipe market, serving driller and production companies, while McJunkin focuses on the "downstream" market, serving refiners and others, one industry-watcher said.

But because McJunkin is owned in part by an investment unit of Goldman Sachs (probably more than 60% of shares), this probably won't be its last move. It's possible the company could be built up through acquisitions and then taken public, the article says. Or it could be sold to a private buyer. Because both companies are private, it's hard to say what will be the next move. Both have kept quiet following the merger announcement. More...

DESPITE BETTER GDP NUMBERS, CONCERNS CONTINUE OVER ECONOMY
Don't get too excited about the recent report that GDP grew at an annual rate of 3.4% in the second quarter, The Wall Street Journal reports. Apparently there is still concern over the continuing housing slump, higher gasoline prices and "tumbling" financial markets, which could "blunt" the momentum of the U.S. economy.

Though there are some positives – commercial construction one of them – some indicators have offset those, including turbulence in credit markets and spending on plant and equipment. Still, much of the worry is due to the residential housing market. WSJ subscription required. More...

BEHIND THE SCENES OF BUILDING PRODUCTS M&A
Despite the down housing market, M&A in building materials continues at a fast pace, according to this interview with an M&A expert in Home Channel News. Larry Morgan, who has participated in 60 separate deals, talked about trends in the industry with HCN, addressing everything from valuations to complicated dealmaking. Culture, he says, is crucial in matching an interested buyer to a seller.

And if a buyer is smart, he won't change much at a lumberyard after buying it, he says. "Buying a lumberyard and making dramatic changes is like going into a grocery store and buying a sack full of groceries, coming out to your car and dumping the groceries on the ground and taking the empty sack home. If it works, don't fix it." Registration required. More...

HCN ANNOUNCES TOP 150 BUILDING PRODUCT/HARDWARE DISTRIBUTORS
Home Channel News recently released its Top 150 distributors of hardware and building products. As expected, the past year's results overall were dour, with more than two-thirds of the companies on the list showing flat or negative sales growth. Just 14 (compared to this year's 101) failed to show growth in the prior year. The steep increase is due not only to the fall in housing starts, but also to commodity and building materials price deflation. Hardlines-focused distributors have had better luck, with sales overall increased 3.1%. Registration Required.More...

GET CREATIVE WHEN RECRUITING POTENTIAL WORKERS
Nucor Corp. has come up with a slogan to draw younger workers to its steel plants: "We turn molten steel into burning passion." The industrial side of our economy – manufacturers and distributors alike – are still facing the dilemma of how to draw high school and college graduates, according to this article in Industry Week. Manufacturers like Nucor are trying to get creative. Ideas include working with City Hall to identify potential labor pools, partnering with local schools and creating outreach programs to groups like returning military personnel. More...

AIR LIQUIDE AN ACQUISITION TARGET?
As always, rumors are flying over potential acquisitions in the distribution and supplier arena – last week we brought up the ever-present speculation that Rexel could buy Hagemeyer. This week, we find the possibility that private equity could be considering Air Liquide, a $15 billion global industrial gases company based in France, according to Forbes. The industrial gases sector has seen robust M&A, but one analyst says that Air Liquide faces formidable opposition in the form of French institutional investors who own nearly a quarter of the company's shares.More...

FROM THE MOST RECENT ISSUE OF MDM: WHY SALES COMPENSATION PLANS FAIL
With the recent attention in this industry given to strategic pricing, distributors who change their pricing structures must consider developing new sales compensation plans that reward improved profits. Before attempting a change, consider all appropriate structures and take steps to avoid implementation pitfalls. Article now available by pay-per-view or subscribe to MDM today. More...

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