July 2007 - Page 2 of 5 - Modern Distribution Management

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July 2007

Report: Rockford Products to File for Bankruptcy

Leave a Comment / Free, Top Distributor Sectors, Fasteners, News, Subscriber Only /

The Rockford Register Star has reported that Rockford Products, Rockford, IL, a manufacturer of cold-formed components, fasteners and other related products, will file for Ch 11 bankruptcy protection to keep it running until a buyer is found.
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A Ch. 11 bankruptcy allows the supplier to restructure its debt. In 1987 employees bought Rockford, which was then near-bankrupt, from Rexnord Inc., according to the paper. The company had $101 million in sales in 2006 and has been buried under debt" since the buyout.
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Rockford's president told the Register Star that growing pension liabilities and the loss of key customers due to the slow automotive and housing markets sparked the decision to file ...

Report: Rockford Products to File for Bankruptcy Read More »

Why Sales Compensation Plans Fail

Leave a Comment / Sales & Marketing, Subscriber Only /

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.

According to a recent study, U.S. companies are markedly more satisfied with their sales compensation programs today than they were two years ago." Having spent the last 10 years designing and implementing sales compensation programs for hundreds of firms, I found this intriguing.

Upon further reading, I discovered that "markedly more satisfied" meant that 59 percent of companies surveyed in 2006 were satisfied compared to 34 percent in 2004. In other ...

Why Sales Compensation Plans Fail Read More »

Monthly Wholesale Trade: May 2007

Leave a Comment / Economic Trends, Research & Analytics, Subscriber Only /

May 2007 sales of merchant wholesalers, except manufacturers'sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $357.2 billion, up 1.3 percent from the revised April level and were up 8.7 percent from the May 2006 level. The April preliminary estimate was revised upward $0.8 billion or 0.2 percent. May sales of durable goods were down 0.5 percent from last month, but were up 4.2 percent from a year ago. Compared to last month, sales of motor vehicle and motor vehicle parts and supplies were down 5.3 percent. May sales of nondurable goods were up 2.9 percent from last month and were up 13.1 percent from last year.

Inventories. Total inventories of merchant wholesalers, except ...

Monthly Wholesale Trade: May 2007 Read More »

Commentary: It’s Time to Shed Your Unprofitable Business

Leave a Comment / Free, Perspective, Strategy, Management, Subscriber Only /

Despite pressures from commodity price increases the past few years, many distributors are finding it hard to raise prices. The traditional method of price increases has too often been to throw five percent (or another guesstimate) against the wall to see if it sticks.

The authors of the article in this issue argue that there is a better, more profitable approach. The solution is to develop products and services that target unique segments with very specific offers. For most distributors, this involves developing a range of offers from the high end (with all the bells and whistles) to the low end (no frills).

The key, the authors say, is to segment the market and build specific offers based on your unique ability to drive economic value (e.g. revenue growth or cost ...

Commentary: It’s Time to Shed Your Unprofitable Business Read More »

MDM News Digest 3714

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Two major distributors of industrial and oilfield PVF supplies, McJunkin Corporation, with nearly $2 billion in annual revenues,&nbsp ; and Red Man Pipe and Supply Company, nearly $1 billion in annual sales, have announced a merger of equals." Charleston, WV, and Tulsa, OK , will serve as co-headquarters for the new company. McJunkin Corporation CEO and President H.B. Wehrle III and Red Man Pipe and Supply Company President and CEO Craig Ketchum will serve as Co-CEOs for the new company.&nbsp ; More ...

Wolseley plc has reported it will close 24 more Stock Building Supply branches, primarily in the Midwest. The closures include a 370 headcount reduction. The announcement comes after ...

MDM News Digest 3714 Read More »

Distribution Financial Metrics and Trading Multiples

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This table highlights key financial metrics and trading multiples for 30 publicly traded distributors in the industrial and building products industries. Download this data below. Also find graphic illustrating median EBIDTA multiples for the same distribution companies.

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<These materials,&nbsp ; prepared by Robert W. Baird & Co. for MDM,&nbsp ; are for informational purposes ...

Distribution Financial Metrics and Trading Multiples Read More »

Airgas Sales Rise 18% in 1Q

Leave a Comment / Free, Gases & Welding Equipment, Companies, Top Distributor Sectors, News, Subscriber Only /

Airgas, Inc., Radnor, PA, U.S. distributor of industrial, medical, and specialty gases, welding, safety, and related products, reported sales increased 18% in its first quarter ended June 30, 2007. Sales were $915 million. Profit was up 34%.
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Acquisitions accounted for 11% of the first-quarter sales growth. Same-store sales increased 7%, with hardgoods up 6% and rent up 8%.
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We had an outstanding quarter. We continue to see good growth in non-residential construction and energy markets, and our strategic products are also performing well," said Airgas CEO Peter ...

Airgas Sales Rise 18% in 1Q Read More »

Watsco Sales Down 6% in First Half

Leave a Comment / Plumbing Products & PVF Distribution, Free, Companies, Top Distributor Sectors, HVACR, News, Subscriber Only /

HVAC distributor Watsco, Inc., Coconut Grove, FL, reported sales decreased 7% to $471 million for the second quarter ended June 30, 2007.
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Revenues in the first six months declined 6% to $842 million. Profit for the first six months was $35.4 million, down from the $41.8 million recorded in the same period a year ago. New branches added $21 million of revenue during the first half of 2007.
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The Watsco network has expanded by 23 locations over the past 12 months, with a working capital investment related to these network expansion activities of $18 million as of June 30, 2007.
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Watsco recently announced it would acquire ACR Group Inc. , which had $240 million in sales in 2006. It has 54 locations in 10 ...

Watsco Sales Down 6% in First Half Read More »

Simpson Strong-Tie Buys Swan Secure Products

Leave a Comment / Finance, Mergers & Acquisitions, Free, Top Distributor Sectors, Fasteners, News, Subscriber Only /

Simpson Strong-Tie Company Inc. has purchased Swan Secure Products Inc., Baltimore, MD, a manufacturer of stainless steel and other fasteners, for $43.5 million in cash. Swan Secure has locations throughout the U.S.

Simpson offers a line of wood-to-wood, wood-to-concrete, and wood-to-masonry connectors and fastening systems, and pre-fabricated shearwalls. Simpson also sells adhesives, mechanical anchors and powder actuated tools for concrete, masonry and ...

Simpson Strong-Tie Buys Swan Secure Products Read More »

Platinum Equity to Buy Ryerson for $2B

Leave a Comment / Finance, Mergers & Acquisitions, Metals Service Centers, Free, Top Distributor Sectors, News, Subscriber Only /

Platinum Equity has agreed to acquire Ryerson Inc., Chicago, IL, for $2 billion, which includes the assumption of debt. The price represents a 15% premium over Ryerson's closing share price on Feb. 31, 2007, the day Ryerson announced it was considering strategic alternatives.

Ryerson is a distributor and processor of metals in North America, with 2006 revenues of $5.9 billion.
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With the transaction, Ryerson will go from a public to a private company.
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The merger agreement allows Ryerson to solicit additional proposals from other potential acquirers through Aug. 18, 2007.
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When Ryerson announced it was considering strategic alternatives for the company, 50 potential acquirers were identified and contacted, including foreign and domestic ...

Platinum Equity to Buy Ryerson for $2B Read More »

Sumitomo Electric Carbide Buys Master Tool

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Mergers & Acquisitions, Free, Finance /

Sumitomo Electric Carbide Inc., Mount Prospect, IL, has acquired cutting tool manufacturer Master Tool, Grand River, OH.
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Master Tool specializes in the development of custom tooling to machine critical features on engine blocks, cylinder heads, connecting rods, crank shafts, transmission cases and other automotives parts.
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Sumitomo manufactures metal cutting tool ...

Sumitomo Electric Carbide Buys Master Tool Read More »

Anixter 2Q Organic Growth at 17%

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Free, Electrical, Companies /

Anixter International Inc., Glenview, IL, distributor of communication products, electrical and electronic wire & cable and a distributor of fasteners and other small parts, reported sales of $1.51 billion in the second quarter ended June 29, 2007, up 22% from the year-ago period.
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Profit for the second quarter increased 31% to $64.6 million. Organic growth for the second quarter was 17%.
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For the six-month period ended June 29, 2007, sales were $2.84 billion, up 22%, and profit was $118.2 million, up 46%.
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Factors influencing overall sales included:

  • Strong larger project business, particularly as relates to data center builds in the enterprise cabling market and within the energy/natural resources customers in the ...

Anixter 2Q Organic Growth at 17% Read More »

M& A at a Record High

Leave a Comment / Subscriber Only, Mergers & Acquisitions, Free, Finance /

Last week continued to be a blockbuster for M & A, with a strong showing by strategic players in the industrial and construction arenas: $400M Kendall Electric will buy $120M RodenLewis-Goetz has acquired Samson IndustrialSaint-Gobain will purchase Norandex.

A recent survey shows that a record $2.7 trillion was spent worldwide on mergers and acquisitions in the first half of 2007 (story). Total mergers in the first half are 67% ...

M& A at a Record High Read More »

Womack Machine Supply Buys FPS Technologies

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Mergers & Acquisitions, Free, Finance /

Womack Machine Supply Company has acquired Birmingham, AL-based FPS Technologies.

FPS distributes many of the same product lines as Womack (Bosch Rexroth, Haskel, Hydac, Hydraforce) and operates a hydraulic repair center near Birmingham . The industries they serve include Automotive, Steel, Wood Products, Material Handling and Marine.

The combination of both companies allows Womack Machine Supply to expand distribution and service of fluid power and automation products into Alabama, Mississippi, and the Florida panhandle.

Womack Machine Supply is an industrial distributor of hydraulic, ...

Womack Machine Supply Buys FPS Technologies Read More »

Myers Industries Approves Acquisition by Private Equity Firm

Leave a Comment / Top Distributor Sectors, Subscriber Only, News, Mergers & Acquisitions, Free, Finance /

Shareholders of Myers Industries, Inc., Akron, OH, has approved the plan of merger, where Myers Holdings Corp., controlled by GS Capital Partners, would acquire the polymer product manufacturer and distributor of tools, equipment and supplies for $1.1 billion, including the assumption of debt.
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The company had sales of $780 million in 2006.
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GS Capital Partners is part of Goldman Sachs & Co.'s Principal Investment Area in the Merchant Banking ...

Myers Industries Approves Acquisition by Private Equity Firm Read More »

Kendall Electric Buys Roden Electric

Leave a Comment / Finance, Mergers & Acquisitions, Free, Top Distributor Sectors, Electrical, News, Subscriber Only /

Kendall Electric has purchased Roden Electric, an electrical distributor in the South Central U.S. with more than $120 million in annual sales.

Kendall Electric has more than $400 million in annual sales. It serves the Industrial, OEM, and Construction markets.

Roden will continue under the Roden brand name.

Investment banking firm Vetus Partners advised on the ...

Kendall Electric Buys Roden Electric Read More »

Saint-Gobain Acquires Norandex

Leave a Comment / Finance, Mergers & Acquisitions, Free, Top Distributor Sectors, Building Materials/Construction, News, Subscriber Only /

Saint-Gobain has acquired the Norandex group from Owens Corning. Norandex group is split into two units: building materials distribution and vinyl siding manufacturing. The deal values Norandex at $343 million.
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Norandex had sales of $866 million in 2006.
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The Norandex brand, which will be integrated into Saint-Gobain's Building Distribution sector, has a network of 153 specialized distribution branches dealing mainly in exterior building products (siding, doors, windows, etc.).

Norandex also has three plants used to manufacture vinyl siding, which are distributed by its own branches as well as by other independent distributors. The Norandex plants will be consolidated with the existing production facilities operated by the exterior building ...

Saint-Gobain Acquires Norandex Read More »

Lewis-Goetz Acquires Samson Industrial

Leave a Comment / Finance, Mergers & Acquisitions, Free, Top Distributor Sectors, News, Subscriber Only /

Lewis-Goetz and Company, Inc., Pittsburgh, PA, has acquired Samson Industrial, expanding its reach further into the Southeast and solidifying its presence in the Gulf Coast.&nbsp ;

Samson Industrial is a distributor and fabricator of specialty industrial supplies specializing in fluid and material conveyance, fluid sealing, vibration and dampening, fastening, personal safety and industrial tools. Samson has 15 locations, including its headquarters in Tulsa, OK.

Lewis-Goetz is a distributor of fabricated industrial rubber products including industrial, hydraulic and metal hose, conveyer belts, gaskets and seals, and related accessories.

Private equity firm Audax Group recent bought Lewis-Goetz, which, with recently acquired Goodall Rubber ...

Lewis-Goetz Acquires Samson Industrial Read More »

PT/MC Distributors Report Rebound in Sales

Leave a Comment / Free, Top Distributor Sectors, Power Transmission/Motion Control/Fluid Power, News, Subscriber Only /

The Power Transmission Distributors Association released May 2007 month-end trend data for distributors and manufacturers of power transmission/motion control (PT/MC) products.
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Following two months of declining sales, U.S. distributors'sales of PT/MC products rebounded with a 2.4 percent increase from April to May.&nbsp ; Year-to-year comparisons remained positive with sales in May 2007 coming in 6.4 percent higher than in May 2006.&nbsp ; Accounts receivable collection days declined 2.1 percent when compared to April.&nbsp ; The May 2007confidence index for U.S. distributors remained unchanged for the third month in a row at 6.6 (on a 10-point scale).
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Canadian distributors'sales of PT/MC products on a month-to-month comparison mirrored the performance of ...

PT/MC Distributors Report Rebound in Sales Read More »

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