SPECIAL REPORT: Wholesale Distribution M&A Update 2007
Purchase today for only $49.95
A bigger picture on mergers and acquisition activity
While many headlines in the past year have focused on the growth of The Home Depot’s wholesale division, and now, its subsequent sale, there’s a broader story. This special report is a collection of our reporting and analysis of recent merger and acquisition activity in wholesale distribution channels. While the activities of The Home Depot are top of mind for most wholesaler-distributors, there are some significant shifts in the landscape behind the headlines and beyond the big deals.
Four years ago, consolidation and M&A activity in most wholesale distribution sectors had slowed to a trickle. Talk was of the quick demise of industrial channels. Many distributors put exit and growth strategies on ice and switched to survival mode. What a difference today.
What has changed is the infusion of outside capital into wholesale distribution markets on a larger scale. There’s more competition for good companies. Financial buyers are changing the overall competitive landscape, valuations and certainly seller expectations. No one expects Home Depot’s 12X EBITDA purchase price of Hughes Supply in early 2006 to set the bar, but it has helped ratchet it up.
This is not likely a repeat of the feeding frenzy in the late 1990s. The lead financial buyers on the scene today are seasoned and very clear about the value points of distribution in general and specific attributes they seek.
Another interesting aspect of this shift to an increased pool of dealmakers in the industry is its impact on consolidation. At the same time Home Depot continued to grow its stake in distribution, there has been a corresponding increase in the base of potential consolidators. There may be fewer larger players overall, but customers will continue to have some very clear choices. That supports the health, value and long-term viability of independent distribution channels. For a more in-depth view of this topic, purchase this MDM special report today for only $49.95.
Thomas P. Gale
Publisher
Modern Distribution Management
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